Neither CN nor CP escaped the disruptions caused by Covid-19, but for both carriers the third quarter of 2021 represented operational turnarounds. For CN, revenue tonne miles in coal, metals and minerals, and petroleum and chemicals were up strongly, offsetting significant drops in grains and fertilizer, intermodal and automotive. Grain traffic, producing Q3 revenues of $510 million, represented a serious drop from the record of $608 million achieved in the prior year’s second quarter. At CP, the story was similar, with strength in fossil fuels and mining products offsetting weakness in grains and potash.
During the quarter, the financial performance at both carriers was remarkably similar. Both increased their revenues by 4-5 per cent, and suffered minor increases in operating expenses, which will undoubtedly be addressed with great urgency at both carriers as a result of displeasure with operating results expressed by one of CN’s principal shareholders, which fund is also a shareholder of CP. Although CP has won the battle over control of Kansas City Southern, the acquisition still requires final regulatory consent to proceed. Meanwhile, J.J. Ruest, who has been CN’s President and CEO for about three years, will be retiring early in 2022, and CN is presently in the midst of seeking a successor.
In 2022 CP will have its hands full absorbing and integrating much smaller KCS, while CN will deal with the integration of a new CEO, and will presumably be facing strong operational and strategic scrutiny. At Canada’s major railways, 2022 will unlikely be a boring year.