Canada's 2 biggest freight railroads have been shut down, and it could impact everything from autos to energy in the US
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- Canada's rail freight has halted as two major rail companies locked out 10,000 union members.
- The stoppage follows failed contract negotiations, with workers demanding better wages and conditions.
- The disruption could cost Canada $251 million daily and impact US industries.
Canada's rail freight came to a halt early Thursday after Canadian National and Canadian Pacific Kansas City locked out nearly 10,000 union members.
The unprecedented stoppage by Canada's two main rail freight operators could disrupt supply chains in the US and cost Canada 341.5 million Canadian dollars, or $251 million, a day, per Moody's.
The stoppage came after months of contract negotiations failed to result in a deal. The workers, represented by the Teamsters Canada Rail Conference, demanded better wages, benefits, and working conditions.
"The main obstacles to reaching an agreement remain the companies' demands, not union proposals," the union wrote in a Thursday statement.
"Neither CN nor CPKC has relented on their push to weaken protections around rest periods and scheduling, increasing the risk of fatigue-related safety issues," it added.
While rail shipments from Canada to the US are halted, the companies' routes within the US would still be operational.
The stoppage could disrupt numerous US industries, from autos to agriculture and energy. It could also disrupt local commuting.
"If rail traffic grinds to a halt, businesses and families across the country will feel the impact," Jay Timmons, the president and CEO of the US National Association of Manufacturers, said in a Monday statement. "Manufacturing workers, their communities, and consumers of all sorts of products will be left reeling from supply chain disruptions."
US Transportation Secretary Pete Buttigieg said earlier in the week on X that he was monitoring the negotiations, including "impacts to the flow of goods across our shared border."
The negotiations echo the US's near-shutdown in 2022, when Congress stepped in to push through a new contract for union rail workers.
In Canada, the companies are betting that a forced work stoppage — in which CN and CPKC bar employees from working, rather than a union-led strike — could head off a more disruptive strike later this year.
"We're right up against the fall peak shipping season. You have a new Canadian grain crop coming in, the first not impacted by drought in two years," CPKC spokesman Patrick Waldron told CNN. "You have Christmas presents in containers arriving at ports. If this pushes further into fall shipping period, the consequences are going to be worse."