Canadian companies faced prolonged shipping headaches on Monday after Canadian National Railway Co. walked away from the bargaining table and withdrew contract enhancements it had offered to striking workers.

The Canadian Auto Workers union, which represents 5,000 striking mechanics, sales clerks and container yard workers at Canada's largest railway, said it was asking the company to resume talks that broke up late on Sunday.

"CN must return to the table and take up where the discussions left off," the union said in a bulletin to its members, who make up nearly a quarter of CN's work force. "The parties were less than C$10 million ($7.6 million) apart, and that is a one-time expense."

The setback means the 2-1/2-week-old strike, already the longest in more than 15 years at Montreal-based CN, is unlikely to come to quick end, and shippers will face further delays and more scrambling to find alternative transportation.

Canadian Transport Minister Tony Valeri said he will continue to monitor the strike closely, but had no intention yet of forcing workers back to work.

CN is North America's biggest hauler of timber products and a large hauler of chemicals, grain and automobiles, but the strike has had a mixed impact so far. Container movements dropped by a quarter during the first full week of the strike from the previous week, but overall traffic slipped only 3 percent.

"From the point of view of the shippers and the Canadian economy and our exports, this is really bad news," said Bob Ballantyne, president of the Canadian Industrial Transportation Association. "There are a lot of companies in a lot of different industries that are really starting to struggle because of the CN strike," he said.

Many shippers have already turned to more expensive truck deliveries to avoid bottlenecks at the yards where containers are loaded between truck and train.

DaimlerChrysler Canada said its operations suffered only a small impact, but General Motors of Canada said it could not ship all finished vehicles. "It's a big headache right now," said GM Canada spokesman Stewart Low. "It really is a lot of jockeying. It's storing vehicles which we don't like to do for a lot of different reasons. There's a cost to that, there's quality issues because you're handling vehicles twice."

CN spokesman Mark Hallman said the railway has withdrawn a three-part offer and improvements agreed in recent days, walking away from the bargaining table after the union refused to back down on what he described as an "economically unrealistic demand."

"The terms of the agreement that we reached with CAW on Jan. 23 remain on the table," he said.

Union members last month rejected that agreement, which included annual wage increases of 3 percent. "CN knows we can't go back to the members with the Jan. 23 rejected settlement," said union negotiator Abe Rosner. "We hope they will change their mind, but we can't force them to see reason."

Analysts have estimated that strike at CN could cut its first quarter profit by up to 10 percent, but the company has refused to comment on the financial impact of the strike.