CN profit up 13 percent on double-digit intermodal volume gain

 

Mark Szakonyi, April 21, 2015, JOC.com

 

Strong volume at Canada’s three largest container ports helped drive Canadian National Railway’s intermodal volume up 14.2 percent in the first quarter compared to the same period a year ago, another sign of how the railroad’s strategy of supply chain collaboration continues to deliver.

 

The strategy — involving strong partnerships with ports and integrated services of various links in the supply chain including forwarding, trucking and warehousing — continues with the company’s investments to support the expansion of the fast-growing Port of Prince Rupert. CN’s “intermodal international franchise will be enhanced” by that project, along with the expansion of the Port of Montreal and new rail on-dock service at the Port of Mobile, Jean-Jacques Ruest, the railroad’s chief marketing officer, said Monday during the company’s first-quarter earnings call. The company reported a 13 percent year-over-year profit increase to C$704 million (US$573 million).

 

The largest Canadian freight railroad also plans to build a $196 million intermodal and logistics hub outside of Toronto. The Milton, Ontario, project will provide additional capacity to support Canada’s largest urban center and a spurt of distribution center activity in the town 30 miles west of Toronto. Milton is roughly 80 miles from Buffalo, New York, the second-largest port of entry for U.S.-Canada trade.

 

“We are an important intermodal carrier in and out of Canada, and we need the growth in terminal capacity to allow us to link up to the investments that are being made by our partners on the West Coast,” CN President and CEO Claude Mongeau told investors.

 

Intermodal revenue in the first quarter rose 11 percent year-over-year to C$698 million, pushing up total revenue 15 percent to nearly C$3.1 billion in the same period. The quarter wasn’t without it challenges, as a derailment in northern Ontario hurt CN’s domestic intermodal service, contributing to the 3 percent decline in that business in the first three months of the year, Ruest said.

 

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