CN Describes Operations Plan Changes

Canadian National executives released more information this week about their plans to change the railroad’s operations.

They discussed laying additional track, acquiring more locomotives and hiring new crew members to handle surging traffic volumes.

CN’s top operating officer, Mike Cory, told investors and analysts that the railroad is placing more focus on scheduling the workload of assets, whether they be car inspectors, locomotives or track capacity.

“To put it simply, it works,” Cory said in reference to the scheduled railroad operating model. “This focus will produce the right balance of cost and profitable growth as we continue to leverage our precision railroad model.”

Cory said CN is changing its schedule patterns to meet changing demands from shippers.

Officials at the railroad have been upfront for the past several months in acknowledging that stronger-than-expected traffic growth in Western Canada created congestion that extend back to Chicago.

CN found it lacked crews, motive power and track capacity to handle the traffic.

The changes have already begun to pay off with CN able to better handle what turned out to be record tonnage during the second quarter of 2018.

“Overall, we saw better operating performance in a quarter where we handled the largest workload in CN history,” Cory said, noting that gross ton-miles were up 8 percent compared to the first quarter — and were 5 percent above the previous record workload.

Terminal dwell times fell by 20 percent compared to the first quarter but were up 16 percent compared to the second quarter of 2017.

Similarly, average train speed rose 4 percent compared to the first quarter, but remained 13 percent below the 2017 second quarter average of 26.1 mph.

CN CEO Jean-Jacques Ruest expects CN to reverse these disparities by the fourth quarter of this year.

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