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Around a third of the traffic moved by the two Canadian rail companies crosses the border with the United States | Image: Wikimedia commons
How integrated are the rail networks across North America?
Canadian National Railway Co and Canadian Pacific Kansas City have said their rail networks south of the border will continue to operate, but industry groups fear that a work stoppage would have far-reaching effects on the movement of goods and commodities across North America.
CN and CPKC’s coast-to-coast rail networks in Canada connect south of the border and serve as important supply chain links to trade corridors and ports across North America.
The networks intersect with those of US rail operators such as BNSF Railway, Union Pacific, Norfolk Southern and CSX, facilitating the movement of billions of dollars’ worth of goods and commodities through ports and warehouses across the continent.
How would a Canadian rail stoppage affect the United States?
Around a third of the traffic moved by the two Canadian rail companies crosses the border with the United States.
Many US companies and producers, especially those in the Midwest, use Canadian ports for imports and exports, as Montreal can be faster for shipments to and from Europe, while Vancouver can be faster for ocean service to and from Asia.
Union Pacific, the No. 2 US railroad operator, has warned that a simultaneous stoppage would have devastating consequences for the US and Canadian economies.
Ratings agency Moody’s said the stoppage could cost over C$341 million ($251.14 million) per day.
How would the US and Canadian farm sectors be affected?
A stoppage would hit the movement of everything from wheat to ethanol, potash fertilizer and meat.
In particular, it would crimp shipments of US spring wheat from Minnesota, North Dakota and South Dakota to the Pacific Northwest for export. A stoppage would also hit Canadian potash and grain exports.
The US exported $28.3 billion of agricultural products to Canada in 2023, making it the third-largest destination for US
agricultural exports behind China and Mexico. The US imported $40.1 billion of Canadian agricultural products last year, making Canada the second-largest source of US agricultural imports.
Will trade with Mexico be affected too?
Mexico is Canada’s third-largest single-country merchandise trading partner behind the US and China, while Canada was Mexico’s fourth-largest merchandise trading partner in 2023.
Mexico exports trucks, cars and vehicle parts to Canada, along with mangoes and avocados. Canada exports wheat, meat, aluminum, cars and parts to Mexico.
Can the trucking industry step into the breach?
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First Published: Aug 22 2024 | 11:04 AM IST
