Quotulatiousness

March 11, 2020

Canadian National’s perfect storm

In Trains, Bill Stephens highlights the terrible time Canada’s largest railway has been having since the beginning of the year:

“DSC02285” by Bengt 1955 is licensed under CC BY-NC 2.0

It would be hard to imagine a worse start to the year for Canadian National, whose volume is down 16% due to a string of events that’s mostly odd, unrelated, and unrelenting. CN is taking it on the chin, as no other North American railroad has seen its volume fall by more than 10% this year and rival Canadian Pacific’s traffic is up 10%.

First, there was Mother Nature. Winter arrived in January with eight days of deep cold in Western Canada, forcing CN to restrict train length. Then powerful rainstorms lashed southern British Columbia starting Jan. 30, washing out CN’s main to Vancouver for six days.

The major washouts occurred in the rugged Fraser River canyon directional running zone where CN and CP share trackage, with CN hosting westbounds and CP carrying eastbounds. The railways had to resort to running directional fleets of 15 to 20 trains at a time over CP’s line. The single-track bottleneck caused eastbound traffic to stack up at the Port of Vancouver and westbounds to be staged as far away as the Prairies. The directional running zone ranks among the top three freight mains by tonnage in North America, alongside BNSF Railway’s Southern Transcon in the Southwest and Union Pacific’s triple track across Nebraska. So this blockage was, by itself, a big deal.

Then came nearly a month of civil protests. On Feb. 6, as CN began digging out from the washout backlog, the first of several First Nations blockades set up camp on CN’s tracks. The blockades, protesting a proposed natural gas pipeline in British Columbia, halted traffic on CN’s Montreal-Toronto mainline in the East. Also ultimately affected: CN’s line to Prince Rupert, British Columbia, which was blocked by protests for six days. Other protests came and went in Edmonton, Alberta; Winnipeg, Manitoba; Quebec; and British Columbia. CP was affected, too, but to a much lesser extent. CP even hosted detour traffic for CN between Montreal and Toronto.

As if that wasn’t enough, then came regulatory woes. The same day the protests began, a CP crude oil train derailed and caught fire in Guernsey, Sask., the second such wreck in the area since December. Hours later Transport Canada issued a ministerial order that restricted key trains – those with 20 or more cars of hazardous materials – to 20 mph in metropolitan areas and 25 mph elsewhere. With the stroke of a pen, Transport Minister Marc Garneau’s knee-jerk reaction effectively reduced CN’s overall capacity by a third. You could call this slowdown “Whoa Canada!”

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