(Bloomberg circulated the following story by Rip Watson on March 4.)
WASHINGTON, D.C. — Canadian National Railway Co., which faces pressure to resolve a two-week strike by mechanics and clerks, hauled 14 percent less freight last week as customers switched to trucks for urgent shipments.
About 5,000 members of the Canadian Auto Workers began striking Feb. 20 after rejecting a three-year contract. The union and the company met yesterday for the first time since talks recessed Friday, and discussions will take place today and tomorrow, company spokesman Mark Hallman said.
The walkout prompted the Canadian Industrial Transportation Association, which represents 130 companies that ship by rail, to join makers of forest products and other goods today in urging the government to exert pressure for a settlement, Robert Ballantyne, president of the group, said in an interview.
“Our members are resorting to movement entirely by truck to meet delivery commitments when they have customers who are waiting for products,” Ballantyne said.
Canadian National’s drop in shipments was reported by the Association of American Railroads, which compiles statistics on shipments in the U.S., Canada and Mexico.
Canadian National, which owns track in the U.S. as well as Canada, shipped 47 percent less cargo such as food by rail and truck combination, according to railroad association. The company’s shipments of other freight, including forest products and grain, rose 0.2 percent in the same period.
Mangers and contractors have taken over tasks such as bills processing.
Canadian Pacific
Total shipments by competitor Canadian Pacific Railway Ltd. rose 19 percent last week, the same as the week before, when Canadian National’s business dropped 8.7 percent.
Canadian National “customers are making freight routing decisions on a daily basis until the labor issues are cleared up,” said A.G. Edwards analyst Donald Broughton, who rates Canadian National shares “neutral” and doesn’t own them. “Once the labor situation is resolved, customers will quickly come back.”
Canadian National stock rose 5 Canadian cents to C$52.10 at 1 p.m. in Toronto Stock Exchange trading.