Canada’s largest railroads shut down: How would the train strike affect the US?
Canada’s two biggest railroads have shut down operations due to a dispute with the Teamsters union, threatening to cause trade disruptions with the U.S.
Canada’s two largest railroads, Canadian Pacific Kansas City and Canadian National, have locked out Teamsters union members after failing to negotiate a contract after days of negotiations.
The labor dispute and ensuing work stoppage would directly impact cross-border trade with the United States. The Canadian government has said it will not intervene, but called on both parties to resolve the issue.
The union members are asking for better working conditions, while the railroads say they have already put substantial raises on the table.
Prior to the strike, the railroads had already been slowing down operations in anticipation of the stoppage. Both railroads had stopped accepting certain shipments of hazardous materials and refrigerated products, and ceased all shipments originating from both the United States and Canada. Canadian National had also banned the import of containers from United States railroads.
Extended strike could cause significant problems
According to Jeff Windau, an industrial analyst for Edward Jones & Co., the work stoppages are expected to last only a few days; otherwise there could be considerable disruptions to the supply chain.
“If something were to drag on for longer, I think there would be some significant potential problems given the amount of freight that is handled every day,” Windau told CBS News. “In general, railroads affect almost the entire economy.”
Aside from freight operations involving huge amounts of goods grinding to a halt, Canadian commuters have also been forced to seek other forms of transportation.
READ ALSO: Fed may cut interest rates next month
READ ALSO: States where car insurance could rise by 50% this year
Canada’s largest railroads shut down: How would the train strike affect the US?
According to Windau, Canadian Pacific Kansas City and Canadian National transport about 40,000 rail cars of freight each day, valued at $1 billion.
This means a train strike in Canada would significantly disrupt supply chains, causing damage to a range of sectors, including the auto, petroleum, chemical, food, and agricultural industries.
Since a strike would disrupt U.S. supply chains, the halt in operations would severely affect the U.S. economy, specifically areas that rely on cross-border trade and key industrial sectors.