Late Thursday, the Canadian government ordered arbitration between the railroads and the rail workers’ union, a move that will end the shutdown. Read the latest coverage here.

Canada’s two main railroads shut down for several hours on Thursday after contract talks with a labor union failed to reach a deal, forcing businesses in North America to grapple with another big supply chain challenge after several years of disruptions.

The sprawling networks of Canadian National and Canadian Pacific Kansas City are crucial to Canada’s economy and an important conduit for exports to the United States, Mexico and other countries. Had it lasted, the stoppage would have forced companies to find other modes of transport, but for some types of cargo, like grains, there are no practical alternatives to railroads.

Canadian National’s network extends into the United States, and Canadian Pacific Kansas City has operations in the United States and Mexico. The companies’ networks outside Canada are still operating because their American and Mexican workers are covered by different labor agreements.

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SKIP ADVERTISEMENTWhat would a shutdown mean?

Canada has recent experience with rail labor disruptions. Strikes in 2015 and 2019 ended in days. The country’s federal government has the power to press the rail workers union, the Teamsters Canada Rail Conference, and management to accept an arbitrated settlement.

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• What
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• Prolonged
• Shutdown
• Rail