Canada Rail Lockout

The Canadian Rail lockout commenced last night at 12:01 am. The lockout of over 9,000 rail workers was implemented by management of Canadian National (CN) and Canadian Pacific Kansas City (CPKC) railways barring employees from working which is different than a union-led strike. This work stoppage could possibly push negotiations forward avoiding a more disruptive strike later this year. Analysts are predicting that the work stoppage will last for a maximum of 2 weeks.

Although CN and CPKC said their rail networks south of the border will continue to operate the work stoppage will still have effects on the movement of goods across the US. CN’s operation stretches all the way to New Orleans while CPKC links to the Port of Corpus Christi, New Orleans and Gulf Port and even extends to Mexico. About one third of the volume moved by the railways crosses the US border. It is estimated that the railways move around 1 billion dollars’ worth of goods and commodities daily. Moody’s has estimated the stoppage could cost over $251 million per day. The US agriculture industry will see the biggest impact as the industry exported $28 billion to Canada in 2023 and several Midwest farmers use the Canadian ports for imports and exports as the sailing time is faster for shipments to and from Europe and Asia. Aside from the effects on the movement of good and commodities, many Canadian commuters were unable to use the commuter rails this morning as the controllers of those rails are part of the union. With these immense impacts on trade and commuters there should be more political pressure to have the government step in and force a deal.

As always, WSSA will continue to monitor the situation and advise as more details on the impact and negotiations are released.

*Photo Reuters/Canadian Railways