Canadian National and Canadian Pacific Kansas City might stop operations due to a labor dispute after midnight Thursday. Photo by the Canadian National Railway Company
A labor dispute between Canada’s two largest rail companies and rail workers might trigger a lockout, strike or both, which could disrupt supply chains in the United States and Canada.
Canadian Pacific Kansas City and Canadian National Railway are poised to lock out almost 9,300 rail workers after midnight Thursday if a labor deal is not reached with the workers. Advertisement
The rail workers also might choose to strike over contentious issues regarding wages, scheduling of shifts and worker fatigue.
The Teamsters union represents the rail workers and has been negotiating a new labor contract since the last one expired at the end of December.
Canadian Prime Minister Justin Trudeau on Wednesday urged the rail companies and Teamsters union to continue working toward a resolution to prevent the lockout.
“Millions of Canadians … are counting on both sides to do the work and get a resolution,” Trudeau told media Wednesday.
A lockout, strike or both could negatively affect the respective economies in the United States and Canada and cause inflation to spike, Axios reported.
Rail shipments of some goods, such as perishable foods and hazardous materials, already have stopped. Advertisement
A work stoppage also could affect the global availability of fertilizer, which could negatively affect global food supplies, Moody’s Analytics senior economist Brendan LaCerda told Axios.
If the rail disruption occurs, it would be the first time Canadian National and Canadian Pacific Kansas City simultaneously cease operations due to labor disputes.
The two railroads account for about $1 billion in goods transported every day, according to the Railway Association of Canada.
A lockout or work stoppage might be short-lived,though, with the Teamsters union saying it might call a strike for the day.
About three-fourths of Canadian-produced goods reach the United States via rail, so a prolonged lockout could disrupt supply chains for food, energy, timber and other products.
Contingency plans utilizing other transportation modes might prevent serious supply chain disruptions in the United States and Canada due to rail-service disruptions.
