A potential rail strike in Canada is drawing closer as the Teamsters Canada Rail Conference (TCRC) and major rail operators, Canadian National (CN) and Canadian Pacific Kansas City (CPKC), continue to struggle to reach an agreement. With the deadline fast approaching, tensions are high.

Read also: How A Canadian Rail Strike Could Impact Freight Markets 

On August 9, the Canada Industrial Relations Board (CIRB) determined that the services provided by the railways are not legally considered ‘essential,’ initiating a 13-day cooling-off period before a strike could legally begin. Despite this, the TCRC served notice yesterday that its members would withdraw services starting Thursday, signaling the onset of a lawful strike.

In response, CSX Transportation, a major US freight railroad, has halted cross-border shipments to and from CN and CPKC, leading the Canadian rail operators to suspend import and export services for refrigerated goods, hazardous materials, and security-sensitive items originating or ending on Canadian railways.

Despite the strike notice, the union has expressed its willingness to continue negotiations with CN and CPKC for as long as necessary. However, CN has reported that recent talks have made “no meaningful progress,” and the parties remain significantly apart on key issues.

As a precaution, CN has begun a phased and progressive shutdown of its network to ensure the safety of communities and cargo, starting with embargoes. CPKC, in a preemptive move, issued a notice to lock out all employees starting at 12:01 am on Thursday. The TCRC criticized this as a tactic to pressure the government into imposing final and binding arbitration, citing concerns over public health, safety, and economic stability.

CN had sought intervention from the Canadian Minister of Labour to refer the unresolved issues to binding arbitration, but the request was denied. The rail operator has warned that unless a swift resolution is reached, it will continue to shut down its network progressively, with additional embargoes likely to be announced today.

It’s important to note that shipments on CN and CPKC railroads with origins and destinations in the US are currently not affected by the embargoes.