Canada’s two largest railroads, Canadian Pacific Kansas City (CPKC) and Canadian National (CN), are preparing to shut down their shipping networks as a labor dispute with the Teamsters union escalates. The conflict, which could lead to lockouts or strikes, threatens to disrupt cross-border trade with the United States.
Both railroads, which transport millions of tons of freight across the U.S.-Canada border, have already halted certain shipments. CPKC and CN have stopped accepting hazardous materials and refrigerated products, and both companies have warned they may lock out Teamsters Canada workers starting Thursday if a labor agreement is not reached.
CPKC announced that it will cease all shipments originating in Canada and those starting in the U.S. destined for Canada by Tuesday, according to a Saturday statement. Similarly, Canadian National has already restricted container imports from U.S. partner railroads as of Friday, reported The Canadian Press.
Jeff Windau, an industrials analyst with Edward Jones & Co., suggested that while work stoppages may only last a few days, an extended disruption could significantly impact supply chains. “If something would carry on more of a longer term in nature, then I think there are some significant potential issues just given the amount of goods that are handled each day,” Windau said, emphasizing that railroads are integral to the economy.
The two railroads manage approximately 40,000 carloads of freight daily, valued at around $1 billion. Critical sectors, including the automotive, chemical, forestry, and agricultural industries, would be severely affected, especially with the harvest season approaching.
Despite the looming threat of a work stoppage, both railroads have extensive operations in the U.S., with CPKC also serving Mexico, and these networks will continue to operate. CPKC has expressed its commitment to avoiding a work stoppage that could harm Canada’s economy and international reputation but acknowledged the need to prepare for potential rail service interruptions. “We must take responsible and prudent steps to prepare for a potential rail service interruption next week,” said CPKC spokesman Patrick Waldron.
The company noted that shutting down the network would allow it to safely remove hazardous materials from the rail system before any potential stoppage.
Negotiations between CPKC, CN, and the Teamsters union have been ongoing since November, with contracts expiring at the end of 2023. Talks have been extended, but the union’s concerns about crew scheduling, rail safety, and worker fatigue remain unresolved.
Union spokesman Christopher Monette indicated that the situation is moving towards a “near certain lockout” by the railroads, despite ongoing negotiations. CPKC confirmed that bargaining would continue on Sunday, while CN expressed frustration over the lack of progress and urged the union to engage meaningfully in upcoming talks.
As the deadline approaches, the prospect of significant disruptions looms, with both sides seeking a resolution to avert a major economic impact on North American trade.