Ratings agency Moody’s said the stoppage could cost over C$341mil or about US$251.14mil per day. — Reuters
OTTAWA: Canada’s two main freight rail companies are set to lock out around 10,000 of their Canadian unionised workers, starting an unprecedented simultaneous work stoppage that would grind almost all railway freight movement in the country to a halt.
Canadian National Railway Co (CN) and Canadian Pacific Kansas City (CPKC) have said their rail networks south of the border will continue to operate, but industry groups fear that a work stoppage would have far-reaching effects on the movement of goods and commodities across North America.
CN and CPKC’s coast-to-coast rail networks in Canada connect south of the border and serve as important supply chain links to trade corridors and ports across North America.
The networks intersect with those of US rail operators such as BNSF Railway, Union Pacific, Norfolk Southern and CSX, facilitating the movement of billions of US dollars’ worth of goods and commodities through ports and warehouses across the continent.
CN’s network stretches south to New Orleans. CPKC’s network links to the US ports of Corpus Christi, New Orleans and Gulfport, and it extends further south to the ports of Tampico and Lazaro Cardenas on the east and west coasts of Mexico.
Around a third of the traffic moved by the two Canadian rail companies crosses the border with the United States.
Many US companies and producers, especially those in the Midwest, use Canadian ports for imports and exports, as Montreal can be faster for shipments to and from Europe, while Vancouver can be faster for ocean service to and from Asia.
Union Pacific, the No. 2 US railroad operator, has warned that a simultaneous stoppage would have devastating consequences for the US and Canadian economies.
Ratings agency Moody’s said the stoppage could cost over C$341mil or about US$251.14mil per day.
Dozens of groups representing miners, farmers, exporters, and fertiliser producers, among others, warned that their sectors face crippling supply-chain delays, increased costs, cash-flow constraints and potential shutdowns in a protracted stoppage.
A stoppage would hit the movement of everything from wheat to ethanol, potash fertiliser and meat.
In particular, it would crimp shipments of US spring wheat from Minnesota, North Dakota and South Dakota to the Pacific Northwest for export. A stoppage would also hit Canadian potash and grain exports.
The United States exported US$28.3bil of agricultural products to Canada in 2023, making it the third-largest destination for US agricultural exports behind China and Mexico.
The United States imported US$40.1bil of Canadian agricultural products last year, making Canada the second-largest source of US agricultural imports.
Ethanol, potash, corn, cereals, food grains, cooking oils, and meat are among the agricultural products traded between the two nations.
Mexico is Canada’s third-largest single-country merchandise trading partner behind the United States and China, while Canada was Mexico’s fourth-largest merchandise trading partner in 2023.
Mexico exports trucks, cars and vehicle parts to Canada, along with mangoes and avocados. Canada exports wheat, meat, aluminium, cars and parts to Mexico. — Reuters
