According to the Intelligent Finance APP, while facing potential disruptions to multiple industries, the trucking industry in Canada is facing an unmet demand for higher freight transport. Daman Grewal, Senior Operations Manager at Centurion Trucking, a trucking company based in British Columbia, Canada, said he saw over 500 posts from shippers seeking to cross Eastern Canada online on Monday, compared to the usual 20 to 30 posts.

Daman Grewal said, "Last week was when the panic started spreading. Similar to what we saw during the pandemic, you can see the scarcity in the supply chain." He pointed out that a few days ago, an 7,000 Canadian dollar (equivalent to 5,139 US dollars) shipping journey that he usually charges has now increased to 9,000 Canadian dollars. He also stated that the company can increase capacity by 10% to 20%, mainly by reducing driver rest time.

However, officials in the trucking industry believe that while the weak economic performance has created room for increased capacity, it is not sufficient to compensate for the gap caused by the suspension of freight railways. Robert Harper, President of the Alberta Motor Transport Association, said that since February, some rail shippers have been trying to book additional trucking capacity before the suspension of freight railways. "The trucking industry can help reallocate assets in the short term, but in the long run, it cannot replace long-haul freight railways because in some cases, the industry has neither the equipment nor the capacity."

It is reported that due to the failure to reach an agreement with the Canadian truck drivers' union on wages and working hours, the two major railway companies in Canada, Canadian National Railway (CN) and Canadian Pacific Kansas City Railway Company (CPKC), are facing the risk of a simultaneous shutdown for the first time, which is expected to result in billions of dollars in economic losses. If the labor and management fail to reach an agreement, nearly 10,000 employees under CN and CPKC will go on strike starting from early Thursday (August 22).

Canada heavily relies on railway transportation for bulk goods such as grains, beans, automobiles, potash, and coal. The Vancouver Trade Commission revealed that the daily value of goods transported by Canadian railways is as high as 1 billion US dollars. CN and CPKC dominate the Canadian railway market, with their capacity accounting for about three-quarters of the total capacity of the country's railway sector. Currently, both CN and CPKC have gradually stopped transporting certain dangerous goods and refrigerated products.

Jeff Windau, an industrial analyst at Edward Jones, predicts that the strike will only last a few days, but if it continues for a longer time, it could cause significant disruptions to the supply chain. He said, "If there's a situation that goes on longer, I think there are some significant potential issues when you think about the amounts of goods that are moved in a given day, because the rail system touches just about every area of the economy."

Jeff Windau added that the trucking industry currently has a surplus of capacity, which may partially compensate for the volume of rail transportation, but "you cannot completely replace all of this with trucking." It is reported that the capacity of a freight train can be replaced by 300 trucks. Once freight rail is shut down, highways can alleviate some logistics pressure, but the cost of trucking is higher than that of railroads, so it is not realistic to completely replace it.

The potential shutdown of Canadian freight rail also affects North American cross-border trade. C.H. Robinson, a US freight forwarding company, expects that 85% of US-Canada cross-border trucking is handled by Canadian trucking companies. "Whenever there is an event that leads to a surge in trucking demand and a sudden tightening of capacity, the cost in the spot market will rise sharply." He added that Canadian trucking costs doubled overnight, which will not only result in higher costs but also longer delivery times.