CN Says it is Recovering From Service Issues

Canadian National said this week that its service continues to recover from various operational problems and that traffic is up 14 percent so far this month.

CN Chief Financial Officer Ghislain Houle told an investors conference this week that the carrier has been performing better than it thought it would, which has made management optimistic about the second half of this year and 2019.

Houle said 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 effects of severe winter weather and an unexpected volume surge.

However, CN’s service metrics continue to trail where they were a year ago. Terminal dwell time is still 10 percent above last year and average train speeds are 15 percent lower. Car-order fulfillment is 70 percent, about 20 points below where it was a year ago.

To bolster its service, CN hired and qualified 400 conductors in the first quarter and expects to have another 400 qualified by the end of June.

It is leasing 130 locomotives and next month will receive the first 10 of 200 new locomotives it has ordered from General Electric Transportation.

The new units are expected to be delivered at a pace of 10 each month for the rest of the year.

Based on revenue ton miles, CN traffic volumes were up 5 percent in April and 14 percent in May after declining 4 percent in the first three months of the year.

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