Canada rail shutdown raises fears of economic disruption

Canada’s major freight railroads, Canadian National Railway (CN) and Canadian Pacific Kansas City Railway (CPKC), have suspended operations due to a contract dispute with workers, a situation that could have a significant economic impact on the U.S. Supply chain expert and former Toronto resident Dr. Johnny Lentusanasem said the suspension could have a significant impact on the U.S. supply chain, given that Canada is the second-largest trading partner of the United States.

Also read: How Canada’s rail strike will impact freight markets

The Canadian government has stepped in to force rail companies into arbitration with unions, but the duration and outcome of that process will determine the extent of the disruption. The outage affects both the rail and trucking industries, and because rail and trucking are so interconnected, it could cause freight costs to soar or even a complete halt to trucking operations.

The unprecedented shutdown, which involves Canadian National Railway Co. and Canadian Railway Corp., also threatens commuter rail service in major Canadian cities such as Vancouver, Toronto and Montreal. The labor dispute involving key personnel such as engineers and train conductors has lasted nearly a year, raising concerns about a prolonged shutdown and its knock-on effects on the North American economy.