Inside Logistics

CN reports intermodal volume surge of 10% on West Coast diversions

February 2, 2015

MONTREAL, Que.–Canadian National Railway (CN) reported that¬†intermodal volume in the fourth quarter grew 10 per cent year on year and expects demand to stay strong as shippers frustrated with US west coast port congestion push US-bound loads through Canadian ports, onto Chicago and down to New Orleans.

The volume boost in the last quarter of the year was mainly due to US shippers diverting goods through Port Metro Vancouver and the ports of Prince Rupert and Montreal, CN chief marketing officer Jean-Jacques Ruest told investors.

Speaking during the fourth-quarter earnings call, Ruest said CN saw a surge of international intermodal shipments in November and December through Canadian ports, adding that “we are still in that now.”

CN feels “constructive about the prospect of the Rupert terminal capacity, which should give CN a west coast opportunity,” Ruest said, pointing out that “a weaker Canadian dollar is good for Canadian ports selling out of the US Midwest.”

Import volume at Prince Rupert, a major gateway for Asian cargo headed to Chicago, jumped 72 per cent year on year last month. Two-thirds of Prince Rupert’s volume comes from or is destined for the US.

Ruest expects to see year-over-year growth starting as soon as the spring. Intermodal revenue rose 10 per cent to C$680 million in the fourth quarter from the same period in 2013, helping to push up the company’s total revenue 17 per cent to C$3.2 billion.

Total volume rose 11 per cent on strong traffic of metal and minerals and coal.

CEO and president Claude Mongeau said US economic expansion and its positive impact on Canada will help fuel both intermodal and carload growth.

He said the company will continue to innovate its intermodal offering, much like it has done in regards to using inbound containers for northbound domestic shipments.

“We have opportunity to use those same containers in our domestic repositioning programmes for export,” Mr Mongeau said. “It’s kind of a double win. It helps our shipping line customers reduce their costs, but it also helps us grow domestic northbound traffic.”