Looming Canada rail shutdown could disrupt US supply chain

Economic losses likely to go beyond 960m of goods transported by trains each day

The two largest Canadian railroad companies will shut down operations on Aug 22 if no agreement is reached with their unionised workers, forcing industries to brace themselves for billions of dollars in losses.

Canadian National Railway and Canadian Pacific Kansas City have issued lockout notices to a union representing more than 9,000 employees at both companies, essentially starting a countdown for a nationwide work stoppage unless parties reach a lastminute deal.

The looming strike has already begun to affect the movement of products, including wheat, chemicals and fertilisers, throughout Canada and the US.

The two rail operators started a phased shutdown of the network last week, while AP MollerMaersk said on Aug 19 that it was no longer accepting shipments for Canada that need to travel by rail and are too heavy for trucks.

"The economic harm will extend well beyond the C$1 billion (S$960 million) of goods that are transported by rail each day," Mr Goldy Hyder, chief executive of the Business Council of Canada, said in an e-mail.