DETROIT (AP) — Canada’s two biggest railroads are beginning to shut down their transportation networks as a labor dispute with the Teamsters union threatens to lead to lockouts and strikes that could disrupt border trade with the United States.
Canadian Pacific Kansas City Railway and Canadian National Railway, which move millions of tonnes of freight across the border, have stopped accepting certain shipments of hazardous materials and refrigerated products.
The two companies have threatened to lock out Teamsters Canada workers starting Thursday if no agreement is reached.
CPKC will suspend all freight traffic departing from Canada and all freight traffic originating in the U.S. to Canada effective Tuesday, the railroad announced Saturday.
The Canadian Press reported that Canadian National banned container imports from its U.S. rail partner on Friday.
Jeff Windau, an industrial analyst at Edward Jones, said his company expects the strike to last only a few days, but if it continues it could cause significant disruptions to the supply chain.
“If something were to continue for a longer period of time, I think there would be some significant issues just because of the amount of goods that are handled every day,” Windau said. “Generally speaking, railroads touch just about everything in the economy.”
The two railroads handle about 40,000 carloads of freight worth $1 billion each day, Windau said, and with harvest season approaching, shipments of finished vehicles, auto parts, chemicals, forest products and agricultural goods will be hit hard, he said.
Both railroads have extensive networks in the United States, and CPKC also provides service to Mexico. The railroads will continue to operate even if there are work stoppages.
CPKC said it remains committed to avoiding work stoppages that would damage Canada’s economy and international reputation, “but we must take responsible and prudent steps to prepare for possible disruptions to rail service next week,” spokesman Patrick Waldron said in a statement.
CPKC said closing the network would allow rail companies to remove hazardous materials from the network before the suspension.
Union spokesman Christopher Monette said in an email Saturday that negotiations are continuing, but the situation has changed from a possible strike to a “near-certain lockout” by the railroad company.
CPKC said negotiations with unions representing about 10,000 workers on both railways were scheduled to continue on Sunday. The company said it would continue negotiating in good faith.
Canadian National said in a statement Friday that no meaningful progress had been made in negotiations and said it expected the union to “conduct meaningful negotiations” at a meeting scheduled for Saturday.
“CN is eager for a solution that will allow us to get back to doing what we do best as a team: moving our customers’ goods and the economy,” the railroad said.
Negotiations have been ongoing since November last year, with the contract expiring at the end of 2023. As negotiations continue, the contract has been extended.
The union said the main issues in dispute were company demands regarding crew schedules, rail safety and worker fatigue.
Concerns about the quality of life of railroad workers dealing with grueling schedules and unpaid sick leave nearly led to a U.S. rail strike two years ago, but Congress stepped in to stop it. Since then, major U.S. railroads have made progress, offering paid sick leave to most railroad workers and working to improve schedules.
Windau said the trucking industry currently has a lot of excess capacity and may be able to make up for some of the rail traffic, but “you’re not going to be able to replace it all with trucking.”
