Canada’s CPKC extends goods embargoes ahead of looming work stoppage By Reuters

By Promit Mukherjee

OTTAWA (Reuters) – Canadian Pacific (NYSE: ) Kansas City said Saturday it would halt all new rail shipments originating in Canada and all new U.S. shipments to Canada starting Tuesday if talks with its Canadian union do not progress.

North American industry groups and shippers are bracing for an unprecedented simultaneous shutdown at both of Canada’s main rail companies that could disrupt the flow of goods such as coal, potash and grain, and manufactured goods from cars to chemicals .

The Teamsters union’s talks with Canadian National Railway (TSX:) and CPKC have stalled, and the rail companies say they will begin a worker lockout on Aug. 22 if they can’t reach a labor agreement. The union says it is prepared to strike for that date.

In an update on Saturday, CPKC said it was taking “prudent steps to prepare for a potential disruption to rail service next week”. He said negotiation talks were scheduled to continue on Sunday.

Earlier this week, CPKC already began stopping any new shipments of hazardous chemicals or dangerous goods.

Separately, CN Rail said on Friday that “there has been no significant progress at the negotiating table” and added that it had also begun a gradual and progressive shutdown of its network.

CN Rail said this would culminate in a deadlock unless a settlement was reached or binding arbitration imposed.

Earlier this week, Canadian Labor Minister Steven MacKinnon rejected a call by CN Rail to initiate binding arbitration between the two sides and called on the company and unions to negotiate in good faith.

Industry groups warn that a simultaneous work stoppage at both rail companies could cause billions of dollars in economic damage.

It could also affect trade with the US and Mexico. The CN and CPKC networks connect key US rail and shipping hubs such as Chicago, New Orleans, Minneapolis and Memphis. The CPKC network also extends further south to ports on the east and west coasts of Mexico.