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Canadian Pacific Stock Up as Strike Ends, Inks 4-Year Deal

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Per Bloomberg, Canadian Pacific Railway Limited (CP - Free Report) has reached a tentative agreement with its labor union Teamsters, thus putting an end to the labor strike that began on Tuesday.

Following this announcement, shares of the company rose 2.9% at the close of business on Mar 30.

On the night of May 29, more than 3,000 locomotive engineers and conductors at Canadian Pacific, represented by Teamsters, went on a strike. The stop-work ensued after union’s rejection of the company’s latest contract offer.

The workers’ collective agreement expired in 2017 and was demanding more predictable schedules to counter crew fatigue among other things.

In fact, the company has been accused of bullying workers and making them slog for long hours. However, Canadian Pacific remained mum on these allegations.

The labor strife came at a time when the Canadian economy was already grappling with freight service disruptions. The conflict if prolonged would have posed a threat to the country’s mining sector, thereby hampering freight revenues. This is because mining comprises more than 50% of annual freight revenues for Canada’s railroads.

However, the new four-year deal puts to rest all of this and allows the company to take advantage of the upbeat freight scenario.

Terms of the agreement were not disclosed and operations at Canadian Pacific are anticipated to resume today.

Earlier on Tuesday, Canadian Pacific reached a three-year agreement with a comparatively smaller union, the International Brotherhood of Electrical Workers.


 

Zacks Rank & Key Picks

Canadian Pacific has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are GATX Corporation (GATX - Free Report) , Expeditors International of Washington, Inc. (EXPD - Free Report) and SkyWest, Inc. (SKYW - Free Report) . While GATX and SkyWest carry a Zacks Rank #2 (Buy), Expeditors sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of GATX, Expeditors and SkyWest have rallied more than 19%, 39% and 65%, respectively, in a year.

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