Canadian Pacific Kansas City (CPKC), a North American freight railway company, announced on Saturday, August 17, that it would halt any new rail shipments from Canada and all new U.S. shipments heading to Canada starting Tuesday, August 20, if negotiations with its Canadian labor union fail to progress.

Industry groups and shipping companies in North America are preparing for an unprecedented simultaneous freight stoppage from the two major railway companies in Canada, which could disrupt the movement of goods such as coal, potash, crude oil, grains, and manufactured goods ranging from cars to chemicals.

Talks between the truck drivers' union and the Canadian National Railway (CN Rail) and CPKC have reached an impasse, and the rail companies say they will begin shutting their doors to workers on August 22 if a labor agreement is not reached. Meanwhile, the union says it is prepared to call for a strike on that date.

In a Saturday update, CPKC stated that it is taking “prudent steps to prepare for a potential railway service disruption next week.” It said talks with the union are scheduled to continue on Sunday.

Earlier this week, Canadian National Railway began halting any new shipments of hazardous chemicals or dangerous goods.

Separately, Canadian National Railway said on Friday: “There has been no substantial progress at the negotiating table,” adding that it has also begun a gradual and phased shutdown of its network.

The company noted that this will culminate in a complete shutdown unless an agreement is reached or binding arbitration is imposed.

Industry groups warn that a simultaneous work stoppage at both companies could inflict economic damages in the billions of dollars. It could also impact trade in Canada with both the United States and Mexico.

CN and CPKC networks link major rail and shipping hubs in the United States such as Chicago, New Orleans, Minneapolis, and Memphis. The CPKC network also extends south to ports on the eastern and western coasts of Mexico.