Canada’s Two Major Freight Railroads Strike
The Canadian National Railway (CN) and Canadian Pacific Kansas City Limited (CPKC) have simultaneously come to a complete stop, halting the movement of approximately $1 billion in goods each day combined, according to the Railway Association of Canada.
Affected industries include:
- Agriculture
- Mining
- Energy
- Retail
- Automotive
- Construction
Canadian ports fear containers will pile up on the docks as cargo goes unmoved, causing congestion and prompting some carriers to reroute to U.S. terminals.
U.S. railways have begun rejecting Canada-bound shipments, with shippers south of the border also relying on Canada’s two main railways to connect to several Mexican ports – Mexico being Canada’s third-largest single-country merchandise trading partner, with exports from Mexico including trucks, cars, and, vehicle parts to Canada, along with mangoes and avocados, and Canada exporting wheat, meat, aluminum, cars, and parts to Mexico.
CN and CPKC state that their rail networks south of the border will continue to operate, but industry groups fear that a stoppage would have far-reaching effects on the movement of goods and commodities across North America. The networks intersect with those of U.S. rail operators such as BNSF Railway, Union Pacific, Norfolk Southern, and CSX, facilitating the movement of billions of dollars worth of goods and commodities through ports and warehouses across the continent.
Truckers say they are facing a surge in demand and that road freight rates are rising for shippers in Canada. However, industry insiders say that while the trucking sector can handle some of the demand, it cannot replace rail distribution. In some cases, the industry does not have the equipment, nor the capacity, to handle bulk commodity cargoes such as potash, food grains, or coal.
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