Canadian Pacific Railway on strike; disruption in freight traffic looms

3000 CP Rail conductors and engineers walked off the job late Tuesday night, however, a second group of 360 signal workers reached a tentative agreement
Canadian Pacific Railway on strike; disruption in freight traffic looms
The labour disagreement at CP Rail has the potential to make freight congestion worse

Canadian Pacific Railway's (TSE:CP) 3000 conductors and engineers walked off the job late on Tuesday night, prompting fears that a strike could cripple rail networks across Canada.

The union representing the striking workers, The Teamsters Canada Rail Conference, said workers walked out at 10 p.m. EST, however, negotiations continued into the night with the company. Federal mediators have been brought in to help hammer out a new labour agreement for the workers.

In more positive news, a second set of about 360 Canadian Pacific Railway (CP Rail) signal workers reached a tentative contract deal with the company. Additionally, it was announced that commuters in Toronto, Montreal and Vancouver would not be affected, despite using CP rail lines.

Freight congestion already an issue

The labour disagreement has the potential to make freight congestion worse — particularly as many companies are already facing slowdowns at CP Rail's larger rival, Canadian National Railway. The lack of rail capacity has had a significant effect, as piles of commodities were stuck in the Canadian prairies this winter, including lumber, grain and oil.

This quarter, intermodal cargo (containerized products and raw materials) was Canadian Pacific’s most significant business line, accounting for C$367mln in revenue — 22% of overall sales. Grain followed just behind, contributing C$367mln.

According to a statement released by CP Rail, it has a contingency plan for a work stoppage and will work with customers to ensure a “smooth, efficient and safe wind down of operations.”

"We can’t imagine that shippers will take these assurances in stride following the subpar rail service this past winter — particularly those in the grain, oil and lumber industries,” said Allison Landry, a Credit Suisse Group AG analyst, in a client note. “We wouldn’t be surprised to see swift government action.”

CP Rail was up 1.67% to $241.01 on Tuesday.

View full CP profile View Profile

Canadian Pacific Railway Timeline

Related Articles

November 19 2017
When finalised, Iplayco will own the IP rights to the Play Mart and Play Planet brands, as well as the Play Planet line of business. .

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright ©, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated.