North American Supply Chains Strain as 80% of Canada’s Railways Shut Down

Canada’s two largest rail freight providers have locked out 9,300 workers following failed talks with the Teamsters Canada Rail Conference union on August 22, blocking key supply chains for North American ports, automakers, mining, agriculture, and other businesses.

The union voted in favor of industrial action over employee working conditions after unsuccessful negotiations with Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), which together account for approximately 80% of Canada’s rail network.

These North American supply lines carry C$1 billion ($740 million) per day in trade. According to estimates from ratings agency Moody’s, Canada’s economy is set to lose C$341 million ($251 million) daily.

On August 20, the Canadian Chamber of Commerce and the US Chamber of Commerce issued a joint statement urging the Ottawa government to act to prevent a “devastating” rail stoppage. The statement warned of the impact on “Canadian businesses and families, as well as the US economy,” which receives 75% of all Canadian exports.

While shipping routes have already been utilized to divert certain Canadian goods to the US ahead of the strike, commodities such as grain, fertilizer, and timber cannot be transferred to trucks and require rail for transportation.