Operations improve on Canadian National as traffic growth resumes

Trains Industry Newsletter
Get a weekly roundup of the industry news you need.
By signing up you may also receive occasional reader surveys and special offers from Trains magazine. View our privacy policy.
CNServiceMetrics
Canadian National
BOSTON — Canadian National’s key operating metrics are showing significant improvement, even as the railroad’s traffic is up 14 percent so far this month, Chief Financial Officer Ghislain Houle told an investor conference on Tuesday.

“We’re performing better than what we thought. We’re moving more volumes than what we thought,” Houle says. “And frankly we’re very bullish with the second half of the year and we are obviously bullish with 2019.”

Average train velocity, terminal dwell, and car-miles per day are all moving in the right direction after several months of deterioration due to the impact of harsh winter weather and an unexpected volume surge that left CN short of crews, power, and track capacity in Western Canada.

Port dwell, which measures the time international containers await loading on double-stack cars, has returned to normal levels at both Vancouver and Prince Rupert, B.C. And CN is on top of grain-hopper placement at country elevators after a record April for grain shipments.

But overall, CN’s metrics lag performance from a year ago. Dwell is 10 percent above last year, while average speeds are 15 percent lower. And car-order fulfillment currently stands at 70 percent, about 20 points below last year at this time.

CN added 400 newly qualified conductors to its ranks in the first quarter, and will have 400 more qualified by the end of June. The railroad has 128 of 130 leased locomotives in service and next month will receive the first 10 new locomotives from General Electric, part of a 200-unit order placed late last year. CN will receive 10 new locomotives each month for the rest of the year, Houle says.

Restoring service to normal levels will hinge on completion of 29 track capacity projects, primarily in Western Canada, sometime in November.

The $400 million in projects include:
  • Four new 12,000-foot sidings and the extension of three sidings to 12,000 feet on the Prince Rupert-Jasper corridor.
  • The addition of 12 miles of double track and extension of one siding to 12,000 feet on the Vancouver-Edmonton corridor.
  • Construction of 46 miles of double track in five sections between Edmonton and Winnipeg.
  • Construction of 6 miles of double track and extension of two sidings to 12,000 feet in the Winnipeg-Chicago corridor, mostly in Minnesota and Wisconsin.
  • Additional yard capacity at Symington Yard in Winnipeg; Swan Landing Yard in Alberta; Scotford Yard near Edmonton; and Ranier Yard in Minnesota.
CN’s traffic volumes, based on revenue ton miles, also are in recovery mode. After falling 4 percent in the first three months of the year, revenue ton miles were up 5 percent in April and are up 14 percent to date in May.

“Our volumes are recovering nicely,” Houle says.

CN expects strong intermodal volume through Vancouver and Prince Rupert. The Alliance, a combination of Yang Ming, Hapag Lloyd, and ONE, began serving Prince Rupert last month, and this year the port expects to hit capacity at its expanded container terminals.

The railroad is seeing strong demand for frac sand, steel, and aluminum shipments. It’s also working through a backlog of pulp and lumber traffic. CN will receive 350 new boxcars this year, as well as 350 new centerbeam flatcars.

CN’s operating ratio increased 6 points in the first quarter, to 67.8 percent. An accounting rules change, which has a disproportionate impact on the Canadian railroads, added 2.5 points to the operating ratio.

Houle said CN’s operating ratio, which has long led the industry, will “start with a five” again once the railroad is fully recovered from its congestion issues.

Houle spoke at the Bank of America Merrill Lynch 2018 Transportation Conference.
Leave a Comment
Want to leave a comment?
Only registered members of TrainsMag.com are allowed to leave comments. Registration is FREE and only takes a couple minutes.

Login or Register now.
Please keep your feedback on-topic and respectful. Trains staffers reserve the right to edit or delete any comments.
0 COMMENTS
Big Boy

Big Boy

All about the world's biggest locomotive

SEE INSIDE THIS ISSUE

Learn more about the stories and photos in this months issue

Newsletter Sign-Up

By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our privacy policy
Subscribe Up To 54% off the newsstand price!
Subscribe To Trains Mag Today
+