During the month of September, Seaway volumes were down 18 per cent from year-ago levels, to 3,991 million tonnes. From March 22 to September 30, cargo shipments totaled 24.8 million tonnes, down 6 per cent from 2018. All cargo categories showed lower volumes, except dry bulk, which was up by 7.3 per cent on a year-to-date basis. The figures reflect a combination of factors including the decrease in U.S. grain exports from earlier in the spring and current delays in the Canadian harvest due to the wet field conditions.
Slow harvest progress in Western Canada is delaying the movement of grain to prairie elevators and export terminals on the West Coast and at Thunder Bay. With harvests estimated to be 20 to 30 per cent behind where they would be normally, it is expected there will be more exports late this fall and into December. (more…)
By Alex Binkley
Canada’s two major railways have quietly gone about their business in the past year turning in strong financial performances and building up their networks even as economic storm clouds gather. They overcame wicked winter weather to record a record grain haul for the crop year ending July 31. As of September, they were still enjoying overall traffic increases of about two percent compared to the same period last year while American railroads were suffering traffic drops.
CN’s and CP’s financial and operating results for the second quarter ended June 30 were both records. CN revenues increased by nine per cent to $3.96 billion while CP rose 13 per cent to $1.98 billion compared to last year. The growth in grain shipments came despite the restrictions on Canadian canola exports to China. CN moved more than 27 million tonnes, bettering its previous best of 26 million tonnes set in 2016-2017. CP hauled 26.8 million tonnes breaking its record set last year. (more…)
By Keith Norbury
In its first year of operation, the Great Sandhills Railway in Saskatchewan had a budget of about $2 million. A decade later, its annual budget is around $7 million.
“Of that $7 million, probably 85 to 90 per cent goes right back within 100 miles of the rail line,” said Perry Pellerin, the railway’s CEO. That economic injection includes buying fuel locally from Co-op and ballast from the municipalities along the 198-kilometre line, which extends from Swift Current, Sask., to just across the Alberta border in McNeill.
“Really anything we can buy locally, we try to do that,” Mr. Pellerin said in a phone interview. “And that’s good for the communities also. It employs people.” (more…)
CN has signed an agreement to acquire the Massena rail line from CSX, which represents more than 220 miles of track between Valleyfield (Quebec), in Canada, and Woodard (New York), in the U.S. The Massena line also serves many cities in the province of Quebec, including Beauharnois and Huntingdon, and in the state of New York, including Massena, Norwood, Potsdam, and Gouverneur. (more…)
CN and CSX have announced a new intermodal service offering, effective October 7, between CN’s greater Montreal & Southern Ontario areas, and the CSX-served ports of Philadelphia, New York, New Jersey and the New York City metropolitan area.
Over the long term, the freight market will increasingly depend on demand driven by the consumer economy and the rail industry must create new intermodal services that can successfully rival the over the road options,” said JJ Ruest, CN’s President and CEO. “This interline service fits perfectly with our strategic focus on feeding our unique network through organic and inorganic growth opportunities, including extending our reach into new geographic markets.” “This new intermodal offering aims to convert long-haul trucks to interline rail services,” explained Keith Reardon, Senior Vice-President, Consumer Product supply chain at CN. “Trains will run directly into the heart of the metropolitan markets of Toronto and Montreal via CN intermodal yards, making this partnership a natural opportunity for both railroads.”
Although details of the impact of the agreement are not available, it is reported that one immediate impact of it will be the closing of CSX’ terminal in Valleyfield, Quebec, at the beginning in October. The terminal has been in operation since 2015, when it was opened at a cost of $107 million. Expected to process in excess of 100,000 containers annually a few years following its opening, the terminal never met volume expectations, and actually never handled more than 100 containers per day.
Both of Canada’s major railways announced second quarter results for the period ended June 30, and both produced great results, particularly CP. At CP, quarterly revenues rose 13 per cent, while CN’s revenues rose 11 per cent. However, while CN’s operating income rose 11 per cent, CP’s rose by 31 per cent.
At CN, operating expenses as a percentage of revenues declined slightly from 58.2 to 57.5 per cent. Cash flow from operations was up slightly to $1.72 billion from $1.68 billion, and “free” cash flow, the amount remaining from operating cash flow after subtracting net investments made during the quarter and dividends paid to investors, fell sharply from $640 million to $126 million. From Jan 1 to June 30, CN spent $864 million repurchasing its own shares (about $140 million less than in 2018), and paid $776 million in dividends. The total of these discretionary cash outflows ($1.64 billion) and the total spent on property additions and acquisitions ($2.08 billion) exceeded CN’s cash generated from operations, which caused the carrier to be a net borrower during the period. As of June 30, the company’s equity stood at $18.0 billion (as compared to $17.6 billion as at December 31, 2018). Total debt increased to $25.02 billion from $23.5 billion (Dec 31, 2018). (more…)