CN & CP Track Blocades

Canadian National (NYSE:CNI) and CP Rail (NYSE:CP) are facing a vexing problem. On June 29 many Aboriginal Bands are threatening to block rail lines that run through their lands. If enough lines are blocked the traffic disruptions will be significant.

Both rail companies have already had more than their fair share of problems resulting from union and labour difficulties with adverse consequences for investors. Many rail company customers are still experiencing logistical problems as their supply chains were broken.

Militant aboriginal leaders may be using the railways as a propaganda tool. Significant rail disruptions will cause a drop in public support among the general public for Aboriginal issues. In the meantime rail customers and investors will suffer as operations are threatened. Everyone claims support for early resolution but the problem continues to fester.

My personal take is that rail blockades will appear sporadically over the summer causing rail traffic disruptions. Desperate customers will conclude that railways are not sufficiently reliable and turn to trucking solutions. Not enough trucks you say. Why then are the teamsters actively lobbying congress to restrict Mexican trucks from entering the United States? Check out Manzanillo as a transportation hub.

A socio-political problem may just leech away much needed cargo from hardworking railroaders. Sorry life is tough all over!