close
close

Possible disruptions in Canadian rail traffic could affect supply chains and prices

Canadian National and Canadian Pacific Kansas City could cease operations at midnight Thursday due to a labor dispute. Photo: Canadian National Railway Company

Aug. 21 (UPI) – A labor dispute between Canada's two largest railroad companies and rail workers could trigger a lockout, a strike or both, potentially disrupting supply chains in the United States and Canada.

Canadian Pacific Kansas City and Canadian National Railway are on the verge of locking out nearly 9,300 rail workers after midnight Thursday if a collective bargaining agreement is not reached with the workers.

Railway workers could also decide to go on strike over contentious issues such as wages, shift scheduling and worker fatigue.

The Teamsters union represents railroad workers and is currently negotiating a new labor contract since the last one expired at the end of December.

Canadian Prime Minister Justin Trudeau on Wednesday called on the railway companies and the Teamsters union to continue working toward a solution to prevent the lockout.

“Millions of Canadians … are counting on both sides to do their work and find a solution,” Trudeau told the media on Wednesday.

A lockout, strike or both could negatively impact the economies of the United States and Canada and lead to a rise in inflation, Axios reported.

Rail transport of some goods, such as perishable food and hazardous substances, has already been suspended.

A work stoppage could also impact the global availability of fertilizers, which in turn could have negative consequences for the global food supply, Brendan LaCerda, senior economist at Moody's Analytics, told Axios.

If there is a disruption in rail traffic, it would be the first time that Canadian National and Canadian Pacific Kansas City simultaneously cease operations due to labor disputes.

According to the Canadian Railway Association, the two railways transport around $1 billion worth of goods every day.

However, a lockout or work stoppage could only be short-lived, as the Teamsters union announced it could call a strike for the day.

About three-quarters of goods produced in Canada reach the United States by rail, so a prolonged lockout could disrupt supply chains for food, energy, lumber and other products.

Contingency plans using other modes of transportation could potentially prevent serious supply chain disruptions in the United States and Canada due to disruptions in rail service.

You may also like...