CN posts larger profit in first quarter

Income was up, despite the effect of rail blockades earlier this year

Despite Canadian National Railway (CN Rail) having taken the brunt of the rail blockades earlier this year, the company saw its net income in the first quarter of 2020 increase by 29 per cent.

The railway recorded a total net income of C$1.011 billion, according to documents on CN’s website.

A good portion of that net income was derived through ‘rightsizing’ methods, which included a 20 per cent reduction in train and engine employees and a 16 per cent overall reduction of CN Rail’s workforce. Plus cutting more than 15 per cent to its active cars on its rail lines and putting 500 locomotives into storage. Also, the company has idled operations in two switching yards in the United States along with two others in Canada.

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In terms of grain and fertilizer shipments, CN Rail saw its revenues in the first three months of 2020 increase by 5.7 per cent to $610 million compared to the same time in 2019. That involved a 1,000-car increase to 150,000 during the first quarter this year.

“CN’s team of dedicated railroaders has demonstrated the company’s ability to overcome difficult situations and keep the economy moving,” said J.J. Ruest, president and chief executive officer, in an April 27 press release. “I am very proud of how we recovered quickly in March from the service disruptions in February. Our network is very fluid, and we are continuing the temporary rightsizing of our resources to match the weaker demand caused by the global recession. We are committed to providing long-term shareholder value by delivering on our strategic capacity investments for growth and by deploying technological innovations.”

CN Rail has also contended with restrictions stemming from the COVID-19 pandemic. Some of CN Rail’s measures include spreading out work areas, staggering shift starts, disinfecting locomotives when servicing, and having medical personnel at each centre to test for symptoms of COVID-19.

About the author

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Glen Hallick - MarketsFarm

Glen Hallick writes for MarketsFarm specializing in grain and commodity market reporting. He previously reported for Postmedia newspapers in southern Manitoba and the province’s Interlake region.

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