Work Stoppage Will Muddy the Canadian Rails' 2024 Performance, but Long-Term Valuation Hit Unlikely

Canadian National and Canadian Pacific Kansas City implemented a worker lockout across Canada on Aug. 22 in response to a stalemate in labor contract negotiations with the Teamsters Canada Rail Conference, or TCRC. We are under the impression that the TCRC would have initiated a strike either way. This work stoppage is somewhat different than others because both railroads are simultaneously affected, which means some Canadian shippers (especially those needing to move commodities like grain and potash) will experience more of a headache than in the past.