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Spot Trucking Rates Poised to Soar in Response to Potential CN/CPKC Rail Strike

Spot Trucking Rates Poised to Soar in Response to Potential CN/CPKC Rail Strike - Universal Logistics Trade Alerts - May 23, 2024

Toronto, May 23, 2024

As labour negotiations continue between Canadian National Railway (CN), Canadian Pacific Kansas City (CPKC) and the Teamsters Canada Rail Conference (TCRC) shippers are bracing for the ramifications of a strike coming to fruition. About 70% of freight moving among Canadian metropolitan areas and half the country’s export volume is transported by rail, however, historically industrial action at the two largest Canadian railroads has not been simultaneous — allowing shippers to switch to the other network. A labour disruption at both Canadian railways simultaneously would gridlock the nation’s supply chain, and with every day that passes, build networkwide congestion.

At this point, many shippers are primarily looking for over-the-road options, which may not be that easy as a typical freight train carries the equivalent of 300 truckloads, and available trucks will fill up fast. Gridlock due to a strike on both rail networks would most likely result in unprecedented Canadian over-the-road trucking rates, and even with such rate increase the national over-the-road capacity cannot absorb the volume of freight that rail presently moves. So, while shippers scramble to find alternatives and come up with contingency planning, the option to move rail cargo via truck is not without limitations and potential freight cost increases.

For more information, please call David Lychek, Director – Ocean & Air Services at (905) 882-4880, ext. 1207.

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