Looming Canadian rail shutdown could impact US supply chain

A breakdown in negotiations between two of Canada’s largest railroads could result in supply chain issues for the U.S. Both the Canadian National Railway and Canadian Pacific Kansas City (CPKC) say that unless a deal is reached with the Teamsters union representing nearly 10,000 workers, those workers will be locked out starting early Thursday, Aug. 22.

The railroads are already starting to shut down their shipping networks in preparation. On Tuesday, Aug. 20, the CPKC will stop all shipments originating in Canada and all shipments from the U.S. that are headed for Canada. Canadian media outlets reported on Friday, Aug. 16, that Canadian National has already stopped container imports from U.S. partner railroads.

It would mark the first time Canada has faced a simultaneous labor stoppage at both the railroads. Normally, they negotiate their labor agreements in alternate years.

The two railroads handle about 40,000 carloads of freight worth about $1 billion. One industrial analyst said shipments of fully built automobiles and auto parts, chemicals, forestry products and agricultural goods would be hit hard.

The Teamsters union said Canadian National wants to implement a forced relocation provision which means workers could be ordered to move across Canada for months at a time to fill labor shortages.

The dispute with Canadian Pacific centers on safety issues , with the Teamsters arguing the company wants to force crews to stay awake longer, increasing the risk of accidents.

Negotiations have been ongoing since November of last year and contracts expired at the end of 2023. They were, however, extended as talks continued. The union said demands from the company concerning crew scheduling, rail safety and worker fatigue are the main sticking points.

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