DETROIT — Canada’s two largest railroads are moving to suspend operations due to an escalating labor dispute with the Teamsters union, which poses a risk of imminent strikes or lockouts disrupting cross-border trade with the U.S.
Canadian Pacific Kansas City (CPKC) and Canadian National Railroads (CN), vital transporters of millions of tons of freight, have halted certain shipments of hazardous materials and refrigerated goods. Both companies have issued ultimatums to lock out Teamsters Canada employees starting Thursday if negotiations fail.
Starting Tuesday, CPKC will cease all shipments originating in Canada as well as those from the U.S. destined for Canada. Additionally, CN has prohibited container imports from its U.S. partner railroads.
Analysts indicate that while work stoppages may initially last only a few days, prolonged disruptions could lead to significant supply chain issues. The two railroads collectively manage around 40,000 carloads of freight each day, valued at approximately $1 billion. Key industries such as automotive, chemicals, forestry, and agriculture could be severely impacted, especially with the harvest season approaching.
Both railroads maintain extensive networks in the U.S. and CPKC also operates in Mexico, allowing these operations to continue despite potential work stoppages. CPKC emphasizes its commitment to avoiding disruptions that may harm Canada’s economy, with a representative stating that responsible steps are being taken in anticipation of service interruptions.
The network shutdown is viewed as a precaution to remove dangerous items from circulation before any work stoppage occurs. Negotiations are ongoing, but union representatives suggest a shift from potential strikes to near-certain lockouts. CPKC is set to continue bargaining, representing nearly 10,000 workers from both railroads.
According to CN, progress in negotiations has stalled, with the company hoping for a productive session with the union scheduled for the coming days. The ongoing discussions stem from contracts that expired at the end of 2023, with deadlines extended as negotiations proceed.
Key issues at the heart of the dispute revolve around crew scheduling, rail safety, and worker fatigue, with precedence in recent U.S. rail labor disputes influencing current negotiations.
While the trucking industry currently possesses excess capacity and may absorb some of the rail traffic, experts note that it cannot fully replace rail transport capabilities.
