How the Impending Canadian Rail Strike Affects Shippers | Advisor Pulse

On May 1st, the Canadian rail unions authorized a strike action set to potentially commence on May 22nd. The decision stems from a deadlock in contract negotiations between the union and both CN and CPKC railways, with safety provisions and wages being the primary issues at hand. The two railways handle approximately 20% of North American intermodal volume.

Potential Canadian Rail Strike Date

The strike is poised to start on May 22nd, though it remains uncertain whether it will involve a complete walkout of all 9,000 workers or unfold in a staggered manner. The unions are required to issue a 72-hour strike notice that could come as early as May 19th, according to JOC.

Impact on Canadian and U.S. Freight

The proposed strike would impact operations manned by Canadian crews only, meaning U.S. operations should see minimal disruption. Consequently, rail and intermodal freight disruptions should be mostly contained to areas north of Chicago and Detroit.

Despite the strike not yet occurring, it is likely that shippers are already activating their contingency plans, shifting away from rail services to mitigate further network disruptions. Shippers with hazmat or perishable freight have typically acted upon contingency plans weeks ahead of past potential strikes, such as during the recent threat of rail strikes in the U.S. at the end of 2022.

As a result, trucking capacities and rates are expected to absorb some of the affected freight, potentially leading to higher linehaul rates. Stabilizing the market after the strike concludes will likely require weeks, if not months.

Strategies for Shippers to Navigate the Impending Strike

The impending rail strike in Canada poses significant operational and financial challenges for shippers and carriers alike, emphasizing the importance of proactive planning and flexible logistics strategies. While it is hopeful that a resolution can be achieved before the strike commences, companies must remain vigilant, exploring alternative transportation modes and routes to minimize the impact on their supply chains.

Breakthrough will continue to monitor the situation closely and provide updates as they become available. With thorough planning and proactive measures, shippers can minimize the impact of this strike on their operations and maintain smooth supply chain operations. Capac-ID can help shippers gain visibility into near real-time linehaul rates and identify compatible carriers for each lane, allowing them to adjust their strategies effectively.

For more information on the potential Canadian rail strike or other events that are impacting your transportation network, subscribe to the Breakthrough blog or contact us with any questions.