Canada is facing unprecedented simultaneous shutdowns at its two largest freight rail operators, which could inflict billions of dollars in economic damage.

The two rail operators, Canadian National and Canadian Pacific Kansas City, are holding separate negotiations with the Teamsters union, which represents about 10,000 workers, including locomotive engineers, conductors, train and yard employees and rail traffic controllers.

Negotiations are currently at an impasse and the rail companies say they will begin laying off workers on August 22 if they cannot reach a labor agreement.

Here are some key facts about the two rail operators:

HISTORICAL CONTEXT:

CN's history dates back to the 1830s, but it was not officially incorporated until 1919. Headquartered in Montreal, the company was government-owned until its IPO in 1995. Through its acquisitions of Illinois Central Corp and Wisconsin Central in the late 1990s and early 2000s, CN expanded its rail network across the Great Lakes region and into the Gulf of Mexico.

The CPKC’s history dates back to the 1880s. Formerly known as CP Rail, it was built to connect Canada from coast to coast to coast. CP Rail has previously been involved in a variety of businesses, including mining and hospitality, and has built and owned iconic Canadian properties such as the Banff Springs Hotel, Toronto’s Royal York and Quebec City’s Château Frontenac.

Calgary-based CP Rail spun off its other operations in 2001. It purchased the Kansas City Southern Railway in 2021 and became CPKC, forming the first single rail line connecting the United States, Mexico and Canada.

RAILWAY NETWORKS

While some U.S. rail operators have small branches that enter Canada, CN Rail and CPKC hold a duopoly and are the two dominant freight rail operators in the country. With networks from coast to coast, the duo accounts for the vast majority of all rail revenues in the country, owns more than 75% of all trackage and represents approximately three-quarters of the total tonnage carried by the rail sector in Canada.

For Canada, both operators are important links in the supply chain to trade corridors and ports on the North American continent.

CN Rail, which employs about 25,000 people, has a network that extends from Vancouver to Halifax, Canada, and as far as New Orleans.

CPKC, which has about 20,000 employees, has a network that stretches from Vancouver to Montreal. It is also connected to the ports of Corpus Christi, New Orleans and Gulfport on the Gulf of Mexico, and further south to the ports of Tampico and Lázaro Cárdenas on Mexico's east and west coasts.

COMPOSITION OF INCOME

In 2023, 25% of CN's freight revenue came from grain, fertilizers and coal; metals, minerals and forest products accounted for 24% of its revenue mix; and petroleum products, chemicals, automobiles and intermodal containers accounted for the remainder.

In 2023, 35% of CPKC's freight revenue came from shipments of coal, grain, potash and fertilizers. Forest products, energy, chemicals, metals and automobiles accounted for 45% of its revenue mix, with the remainder coming from intermodal containerized freight.

PREVIOUS JUDGMENTS

In 2019, about 3,200 unionized CN workers, including drivers and shipyard workers, went on an eight-day strike in Canada. The strike led to fuel shortages, long delays and a slowdown in industrial production at plants that make products ranging from chemicals to canola oil.

In 2018, a one-day strike ended after the Teamsters and CP Rail reached a four-year contract. And in 2015, CP Rail and the Teamsters agreed to mediation, ending another short-lived strike.

In 2012, some 4,800 CP Rail locomotive engineers, conductors and shipyard workers went on strike for more than a week, ending only after the government introduced back-to-work legislation, at a time when the economy was still recovering from the global financial crisis and recession.