Ryder Systems, a Canadian provider of transportation services, said that the trucking industry should be able handle an increase in freight volumes in the event of rail strikes. However it warned that shipping costs may rise.

Canadian National and Canadian Pacific Kansas City, the two country's largest railroads, are dragging out negotiations over a new agreement. The Teamsters union represents more than 9,000 workers.

In May, Labor Minister Seamus o'Regan referred the dispute back to the Canadian Industrial Relations Board. This ensured that a walkout would not take place until the Board made a decision about the safety implications of a strike.

Ryder stated in a Monday statement that it can tap into its dedicated transport service offering, and contract outsourced capacities within its Transportation Management Group in the event of a spike in volume.

Kevin Clonch said that if a strike were to occur, it would likely lead to a shift in capacity, primarily towards truckloads.

Ryder stated that shippers are still cautious of the costs associated with a possible switch from rail to truckload. This is because intermodal shipments - which are the most popular among shippers due to their cost effectiveness - could be severely affected in the event of strike.

Ryder has said that it has discussed alternative strategies with customers, including the possibility of shipping intermodally to border locations near Ryder to reduce costs and then using trucks for the final mile.

Daniel Imbro, Stephens analyst, said that "given concerns over service disruptions...the uncertainty could lead some shippers import freight to U.S. instead of Canadian ports."

Ryder, a Miami-based company, provides logistics services in the United States, Mexico and Canada. It manages nearly 260,000 vehicles and operates about 300 warehouses. (Reporting and editing by Maju Samuel in Bengaluru, with Abhinav parmar reporting from Bengaluru)