How a Canada railroad workers' strike could affect supply chains

​Being prepared for potential service disruptions is part of Scott Shannon's job.

As a VP with C.H. Robinson Worldwide's North American Transportation Division, he oversees the brokerage's operations in Canada where it manages more than 650,000 cross border shipments annually.

So when Shannon learned in May that Canadian railroad workers authorized a strike, he recognized the crippling impact it could have on freight movement, and immediately began contingency planning. The plan wasn't needed at the time - the Canadian government halted it to assess the public impact of a strike - but Shannon is keeping contingencies ready in case disruption eventually comes.

While no strike is imminent, the prospects of a work stoppage by Canada's nearly 10,000 union railroad workers has plagued logistics managers, like Shannon, for months. On July 12, the Canadian government announced it would release a decision by Aug. 9 on whether a work stoppage by the Teamsters Canada Rail Conference would impact residents' health and safety. If it's determined there is no safety risk to citizens, represented workers are positioned to legally strike 72 hours after the government announces its decision.

The union, Teamsters Canada Rail Conference, has said it is prepared to strike unless it gets a new labor deal to replace its contract that expired Dec. 31, 2023. Here's what such a strike would mean for supply chains, according to several logistics experts.

How would a rail strike in Canada affect supply chains?

Every day of a strike would have the potential to ripple into further supply chain disruptions, as railroads are critical links for maritime, trucking and cross-border freight shipments, experts said.

More than 900,000 metric tons of goods move daily on Canada's railways, according to the Railway Association of Canada. A work stoppage would impact the movement of $1 billion in goods daily.

Lawrence Gross, president of Gross Transportation Consulting, said Canada's western ports would be among the first impacted by a strike as a substantial percentage of containers arriving in Vancouver and Prince Rupert move inland on railroads.

A strike lasting more than a day or two would take weeks for Canada's railroad network to recover, Gross said.

Similarly, Shannon said cross-border freight shipments between the U.S. and Canada are heavily dependent on railroads, and could be quickly affected.

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