Canadian National Railway (CNR) and Canadian Pacific Kansas City (CPKC) have each shutdown their rail networks and locked out a combined 10,000 workers after labour negotiations with the Teamsters union failed.
Canada is now in the midst of an unprecedented shutdown of the country’s freight rail network that is expected to halt the shipments of goods and commodities and cause disruptions at the country’s ports and with international trade.
Analysts have warned that the current situation is likely to cost the Canadian economy billions of dollars and damage trade relations with the neighboring U.S. and other countries.
Rail transport accounted for 14% of bilateral trade between the U.S. and Canada, worth $382.4 billion U.S., in the first half of this year, according to the U.S. Department of Transportation.
As the second-largest country in the world by land mass, Canada has an outsized reliance on rail transport. Canada’s railways transport $380 billion worth of goods annually, according to federal government data.
Shipments of grain, potash, coal and chemicals have now ground to a halt.
The shutdown comes after months of protracted labour negotiations aimed at reaching a new collective agreement with the Teamsters union failed.
The union is seeking improved provisions for pay, scheduling, and safety measures. The railways say they have offered better wages and fewer working days.
The stock of Canadian National Railway has declined 7% so far this year to trade at $155.28 per share.
Canadian Pacific Kansas City’s stock has risen 3% year-to-date to trade at $108.52 a share.
