CN and CSX announce new intermodal service offering

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.

CN and CP announce second quarter results

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…)

Canadian Pacific moves record amount of Canadian grain and grain products during 2018-2019 crop year

​Canadian Pacific moved a record amount of Canadian grain and grain products during the 2018-2019 crop year. The final tally for the crop year stands at 26.8 million metric tonnes (MMT) of Canadian grain and grain products, 2.8 percent more than the prior record set in the previous season and 3.9 percent more than the three-year average.

CP’s 8,500-foot High Efficiency Product (HEP) train model, announced last summer, continues to gain significant traction with CP customers. Construction is currently underway at five CP-served facilities in Canada, enabling producers to start shipping under the HEP train model this fall. These add to the seven existing CP-served 8,500-foot loop-track facilities. Four additional 8,500-foot HEP-qualified facilities will be operating by spring 2020. (more…)

After all-time record year, CN prepared to move 2019-2020 grain crop

CN announced that it has published its 2019-2020 Grain Plan and that it has established a CN Agricultural Advisory Council.

The Grain Plan reviews CN’s performance during the previous crop year, which was a CN all-time record, assesses CN’s ability to move anticipated levels of grain during the upcoming crop year, and identifies specific steps that CN is taking to ensure it has the necessary capacity to move grain efficiently. For the second year, CN will again voluntarily update the plan on a monthly basis to ensure transparency and accountability. The Grain Plan is developed through consultations with grain industry stakeholders. (more…)

CN and CP announce first quarter 2019 results

Both of Canada’s major railways felt the effects of a poor weather and cold temperatures, and produced similar financial results. As is evident from the table, net income as a percentage of revenues tumbled dramatically from 34 per cent in the first quarter of 2016 to 21 per cent in 2018 at CP, but recovered to 24.6 per cent in the first quarter of 2019.  At CN, net income as a percentage of revenues dropped from 26.7 per cent in 2016 to 23.2 per cent in 2018, and further declined to 22.2 per cent in Q1 of 2019. Both carriers eased up on their share repurchasing activities. Stock repurchases increase earnings per share numbers, as earnings are divided by a reduced number of outstanding shares. (more…)

CN maximizing the use of rail into Port of Prince Rupert, and reports record grain shipments in April

CN maximizing the use of rail into Port of Prince Rupert, and reports record grain shipments in April

The first train of thermal coal from Coalspur’s Vista Mine in Hinton, Alberta has shipped to Ridley Terminals. CN is also delivering the first unit train of propane from Alberta for export via the new AltaGas Ridley Island Propane Export Terminal.

“I’m very proud to announce the start of these new export supply chains to Asia,” said JJ Ruest, CN’s President and CEO. “Our objective is to help create export supply chains that get national resources to the best markets for our customers.  These projects support jobs and increase Canada’s role as an international energy provider into Asia. As these new projects and our record grain movements for the month of April demonstrate, our capital investments are strengthening our existing network and expanding our capacity to move more western Canadian natural resources to market safely and efficiently.” (more…)