Work stoppage at Canada’s two biggest railroads may affect trade with U.S. (NYSE:CP)

The two biggest railroads in Canada started to shut down their networks as possible worker lockouts or strikes loom amid a contract dispute with the Teamsters union that may affect trade with the United States.

The Canadian Pacific Kansas City and Canadian National railroads stopped receiving some shipments of hazardous materials and refrigerated products, the Associated Press reported. The companies threatened to lock out workers represented by Teamsters Canada starting on Thursday unless they reach a deal.

CPKC on Tuesday will stop all shipments that start in Canada and all shipments that originate in the U.S. on their way to Canada, according to a statement. Canadian National on Friday halted container imports from U.S. partner railroads, media reports said.

The two carriers handle almost 40,000 carloads of freight a day, valued at about $1 billion, according to an analyst cited by the Associated Press. Possibly affected goods include cars and auto parts, chemicals, forest products and crops.