Canadian National Railway Company (CNI - Free Report) has reached a tentative deal with the labor union representing 3,200 conductors and yard crews, ending the eight-day long strike. The deadlock wreaked havoc on the Canadian economy, which was already struggling on the agriculture front due to poor harvest conditions and the U.S.-China trade dispute.
Following the agreement on Nov 26, operations at Canadian National resumed on Nov 27. Terms of the agreement between the company and the labor union, Teamsters Canada Rail Conference, were kept under wraps. The union said that the agreement needs to be ratified by Teamsters members through secret-ballot electronic voting, the results of which are expected in eight weeks.
With the cessation of the strike, the labor union Unifor stated that the notices which they received regarding the layoff of 70 workers in Halifax have been revoked. (Read more: Rail Strike at Canadian National Calls for Lay-offs in Halifax)
Canadian National employees began a strike on Nov 19, agitating over safety issues, working conditions including time to take break and benefits. With Canada depending heavily on railroads for transportation of freight such as crops, potash, coal and manufactured goods to ports and the United States, the strike had a significant impact on the operations of shippers.
Additionally, the Mining Association of Canada stated that the strike "was deeply felt by the sector", resulting in “costly disruptions for Canadian mining companies, many of whom incurred significant impacts over the last seven days, including lost sales and customers”. In fact, the effect of the deadlock is likely to linger for a while.
Zacks Rank & Key Picks
Canadian National carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Kansas City Southern (KSU - Free Report) , Allegiant Travel Company (ALGT - Free Report) and Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) . While Allegiant sports a Zacks Rank #1 (Strong Buy), Kansas City Southern and Controladora Vuela carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Kansas City Southern, Allegiant Travel and Controladora Vuela have soared more than 61%, 71% and 97%, respectively, so far this year.
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