Workers at Canada's two largest rail companies may go on strike Monday as a labor dispute intensifies in the country's railroads, disrupting some cross-border rail freight and affecting North American supply chains, AP reported Wednesday. That would be a "catastrophe," according to Reuters.
Canadian National Rail and Canadian Pacific Kansas City Railway (CPKC) have suspended some shipments due to an impasse in negotiations with the rail workers' union, the Canadian Press reported. Canadian National Rail issued a notice last week saying it could disrupt shipments of more commodities if a labor agreement is not reached in time. CPKC said earlier this month that it would temporarily suspend the transportation of dangerous goods to ensure that no dangerous goods would be stranded on the tracks in the event of a subsequent strike, for example. Last week, the company halted all shipments of toxic and hazardous substances "with inhalation hazards" on its North American rail network. If the two sides cannot reach an agreement, 9,300 employees of the two companies will be suspended on April 22.
The two Canadian rail companies have extensive presence in the United States, and CPKC's rail line also connects to Mexico. The two companies move as many as 40,000 carloads a day worth about $1 billion. Once the rail freight shutdown, the US-Canada border trade logistics will be greatly affected, the more serious areas of impact include automobile vehicles and accessories, chemicals, agricultural and forestry products. With the harvest season approaching, the impact of the disruption of rail freight on agriculture will be more serious.
Supply Chain Dive, a supply chain news site that tracks the labor dispute at Canada Rail, was not optimistic about the prospects for labor negotiations, and revealed that logistics industry members have been working on contingency plans for a disruption of U.S.-Canada rail freight since at least May. The article said that in the past, if a company negotiated a problem affecting the transportation, then the transportation can be transferred to another company's network, but this time the two companies are negotiating at the same time. Supplies arriving at Canadian ports are mainly transferred across Canada and across the border into the United States on the Canadian rail network. Railways are a vital part of the logistics system, and it can take weeks for the entire network to recover after a single day of disruption. In the event of disruption of Crail-bound shipments, they can be transferred by truck or transferred to other ports in North America. The capacity of one freight train can be replaced by 300 trucks, but road transport costs are higher than rail. The Associated Press quoted industry analysts as saying that once the railway freight is halted, the road can share a certain logistics pressure, but it is not realistic to completely replace the railway with road transport.
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