Canada’s major freight railroads, Canadian National (CN) and Canadian Pacific Kansas City (CPKC), have halted operations due to a contract dispute with their workers, a situation that could have significant economic repercussions for the United States. According to Johnny Rungtusanatham, PhD, a supply chain expert and former Toronto resident, the shutdown could severely impact U.S. supply chains, given Canada’s role as the second-largest trading partner of the U.S.

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The Canadian government has intervened, forcing the railroads into arbitration with the labor union, but the length and outcome of this process will determine the extent of the disruption. The shutdown affects both the rail and trucking industries, with the potential to cause skyrocketing freight costs or even a complete halt in trucking operations due to the interconnected nature of rail and truck transport.

The shutdown is unprecedented in its scope, involving both CN and CPKC, and also threatens commuter rail services in major Canadian cities like Vancouver, Toronto, and Montreal. The labor dispute, involving key personnel such as engineers and conductors, has been ongoing for nearly a year, raising concerns about prolonged disruptions and their cascading effects on the North American economy.