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Are Railroad Companies Becoming More Employee Friendly?

The Zacks Transportation - Rail industry’s participants are being weighed down by challenges like inflation-induced high interest rates, elevated fuel prices and supply-chain woes. Most industry players are looking to drive their bottom line amid the headwinds through cost reduction.

Partly due to these headwinds, the industry has declined 4% so far this year, underperforming the S&P 500 Index’s 10.7% appreciation and 2.4% rise of the broader Zacks Transportation sector.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Despite the challenges surrounding the industry, it has been an encouraging move on railroad companies’ part to take care of employees’ needs by entering into collective deals with the unions. Companies like Canadian National Railway Company (CNI), Union Pacific Corporation (UNP), Norfolk Southern Corporation NSC and CSX Corporation CSX have tried to address their employees’ requirements through multiple initiatives such as by increasing their paid sick leaves, offering them better working schedules to ensure a balanced personal and professional life and improving working conditions.

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Each of the abovementioned stocks carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Canadian National recently announced that its collective agreement with Teamsters Canada Rail Conference (TCRC) has been ratified. The union represents almost 6,000 Canadian National locomotive engineers, conductors, yard conductors and yard coordinators working in Canada.

Tracy Robinson, president and chief executive officer of CNI, stated, “We are pleased that TCRC members have ratified the collective agreement reached earlier this year. We thank the TCRC leadership for their engagement throughout this process.  We remain committed to working with this important group to ensure continued service for our customers and improved working conditions for our team members."

Union Pacific has entered into a tentativeagreement with the Brotherhood of Locomotive Engineers and Trainmen (BLET). The deal is aimed at improving the quality of life for Union Pacific’s locomotive engineers and their families by offering them better working schedules.

UNP employs nearly 5,600 locomotive engineers represented by BLET. The tentative deal offers locomotive engineers 11 days on and four days off schedule. This deal should help UNP progress productively with its employees with the new work/rest schedules.

Norfolk Southern has entered into an agreement with BLET, aimed at offering up to seven paid sick days per year to BLET members. This deal will offer five new days of paid sick leave per year to Norfolk Southern engineers. Further, it will also provide them the flexibility to use up to two additional days of existing paid time off as sick leave.

The deal covers more than 3,300 Norfolk Southern engineers, representing almost 25% of the NS craft workforce. With this agreement, almost all the company's craft employees — approximately 98% — have entered into paid sick leave deals.

CSX announced that it has entered into a tentative agreement with the Sheet Metal, Air, Rail and Transportation Workers-Transportation Division CSRA (SMART-TD CSRA), aimed at offering paid sick leave benefits. This deal (which is pending ratification by union members) is the 10th one between CSX and its union-represented employees since February. Most of CSX’s unionized workers now have paid sick leave benefits.

SMART-TD CSRA represents trainmen, conductors and yardmen on territories of CSX’s Atlanta and West Point railroad, Winston-Salem Southbound railway, Louisville and Nashville railroad, Nashville, Chattanooga and St. Louis Railway and Seaboard Coast Line railroad.

Such agreements reflect the employee-friendly attitude of the railroad companies through which they try to maintain cordial relations with employees and the unions representing them, thereby providing a healthy work atmosphere. These efforts should also help the companies retain and recruit more employees.

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CSX Corporation (CSX) : Free Stock Analysis Report

Union Pacific Corporation (UNP) : Free Stock Analysis Report

Canadian National Railway Company (CNI) : Free Stock Analysis Report

Norfolk Southern Corporation (NSC) : Free Stock Analysis Report

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Zacks Investment Research