CN is investing C$400 million in new capacity this year, primarily in western Canada and the Edmonton-Chicago corridor. Projects currently in progress include 60 miles of double track, 11 new sidings or siding extensions, and eight yard expansions. All should be completed in November.
Interim CEO Jean-Jacques Ruest told a recent investor conference the projects are meant to address stronger-than-anticipated traffic growth that occurred in 2017, as well as projected growth through 2019’s second quarter. Next year, the capacity expansion will continue, to prepare the railroad to handle projected 2020 levels.
Among expected growth over the next two years is the container facility at the Port of Prince Rupert, B.C., which is expected to hit maximum capacity at least two years ahead of schedule. As well, at Prince Rupert, export coal traffic is increasing, and two new export terminals will be opened in 2019 and 2020.
Ruest said CN’s operations suffered last year from a shortage of capacity brought on in part by the railroad’s attempt at limiting capital expenditures to roughly 20% of revenue. That strategy didn’t work, as CN found itself dealing with crew and power shortages, on top of track capacity constraints. During the rough winter of 2017-2018, CN’s busy Winnipeg-Chicago corridor couldn’t handle the strain. In particular, grain movements—heavily regulated in Canada—suffered.
Two days after being named interim CEO in March, following Luc Jobin’s ouster, Ruest implemented a grain movement mobilization plan. Currently, he said, CN has not fallen behind with grain shipments and has fulfilled all orders for empty grain hoppers.
As well, CN has ordered 1,000 high-capacity grain hoppers from National Steel Car, Hamilton, Ont. These cars have a 5,431 cubic-foot-capacity and are rated at 286K GRL (gross rail load).
Ruest said CN’s performance metrics are improving, with daily tonnage on the increase, car dwell time decreasing, and car order fulfillment improving. Average train velocity remains “below normal” due to lack of siding capacity, but should improve significantly once the double-track and siding extension projects are finished.
Port container dwell time at Prince Rupert and Vancouver is back to a “normal” range of two days.