Canadian rail shutdown leaves billions in U.S. trade stranded, with economic impact to grow day by day

Canada's Labor Minister Steven MacKinnon announced at a press conference on Thursday that he had directed the Canada Industrial Relations Board (CIRB) to review his request for binding arbitration and the immediate resumption of rail operations.

The labor minister's office told CNBC that the CIRB gets to decide whether to move forward with the request.

"Negotiated agreements have and always will be the best way forward," a statement from MacKinnon said. "Collective bargaining is how the strongest, longest lasting deals are made – deals that are good for unions and employers alike."

MacKinnon said at the press conference that he was "confident" the CIRB would accept his referral.

CNBC has reached out to CIRB for comment.

The highly integrated trade relationship between the Canadian and U.S. economies has left billions worth of cargo in limbo after over 9,000 freight rail workers represented by the Teamsters Canada union were locked out by Canadian National Railway and Canadian Pacific Kansas City after months of failing negotiations.

Rail cross-border trade with the U.S. is at a standstill, which according to the U.S. Department of Transportation, accounted for 14% of total bilateral trade of $382.4 billion between the countries for the first half of the year. Approximately $572 million in container trade arrives daily in the U.S. from Canada, according to U.S. Census data.

Rails are a large component of logistics for companies, from Dow Chemical to automakers in Detroit like Ford and General Motors, which use the rails to transport auto parts. Retailers such as Walmart, Target, Nike, Procter & Gamble and Canada Goose also import some of their goods into Canadian ports which are then transported by rail and truck. According to