Canadian truckers well positioned to benefit in case of rail strike, Ryder Systems says

By Abhinav Parmar

(Reuters) - Canadian transportation services provider Ryder Systems said the trucking market should be able to handle a jump in freight volume in the event of a rail strike, though it signaled that the cost of shipping may increase.

The Canadian industry is on tenterhooks as talks between the Teamsters union, which represents more than 9,000 workers, and the country's two largest railroads - Canadian National and Canadian Pacific Kansas City - drag on over a new contract.

Labor Minister Seamus O'Regan in May referred the dispute to the Canadian Industrial Relations Board (CPKC) ensuring that a possible walkout does not occur until it issues a decision on the safety impacts of a strike.

In a statement to Reuters on Monday, Ryder said it has the ability to tap into its dedicated transportation service offering and contract outsourced capacity within its transportation management group in case of a volume spike.

"Should a strike ultimately occur, the industry as a whole should expect that there would be a capacity shift primarily to truckload," said Kevin Clonch, group director of customer logistics at Ryder.

Shippers remain cautious about the cost attached to a possible shift from railroad to truckload, Ryder said, as intermodal shipments, which are most desired by shippers because of its cost effectiveness, could be largely impacted in the event of a strike.

Ryder said it has discussed some alternative strategies with its customers to still ship intermodal to nearby border locations where appropriate to mitigate cost impact, and then ship by truck for the last mile.

"Given concerns about service disruptions ... the uncertainty could cause some shippers to import freight into U.S. ports instead of Canadian ports," Stephens analyst Daniel Imbro said.

Miami-based Ryder provides logistics services throughout the United States, Mexico, and Canada, managing nearly 260,000 commercial vehicles and operating about 300 warehouses.

(Reporting by Abhinav Parmar in Bengaluru; Editing by Maju Samuel)