rail

Canada Rail Lockout Threatens Economic Chaos

Jerome Washington · August 23, 2024 · 1 min read

The Canadian rail strike has put on hold the jobs of 9,000 workers, sparking a supply chain crisis. Here are some key points from this situation:

1/ Canada’s two largest railways—Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC)—have locked out more than 9,000 workers after labor talks with the Teamsters union fell apart. The result? A total shutdown of Canada’s freight rail traffic, shaking the…— Ryan Petersen (@typesfast) August 22, 2024

CN Railway and CPKC locked out Teamsters union members on Thursday
Work stoppage threatens $250 million in daily economic losses
Negotiations stalled over safety concerns and scheduling issues

Impact Across Other Industries:

Grain Exports Halted

Western Grain Elevator Association warns of $36 million daily losses
Delayed shipments could push deliveries into 2025!

The Chemical Sector

Chlorine supplies for water treatment running low
Something to note - 60% of western U.S. chlorine comes from Canada

The Auto Industry

Parts shortages could slow production
With the US and Canada having integrated supply chains puts U.S. plants also at risk

Canada's Government Under Pressure

Labor Minister Steven MacKinnon initially resisted calls to intervene, stating:

"It is the responsibility of the union and railroads to negotiate a new agreement."

However, mounting economic pressure forced action. The government has now ordered binding arbitration to end the dispute and restart rail operations "forthwith."

Other Potential Impact?

With rail accounting for 16% of U.S.-Canada freight, a prolonged stoppage could have far-reaching consequences.

Businesses warn of plant closures and supply shortages if the situation isn't resolved quickly.

We covered in our newsletter some potential impacts on US freight with the possibilities of increased demand for trucks, potential rate increases, and the aforementioned supply chain delays.