June 20 (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 ( CP ) - 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.