Railroad News

CN's second-quarter 2016 net income declined slightly to $858 million, or $1.10 in diluted earnings per share, from $886 million, or $1.10, a year ago due to lower traffic volumes, the Class I announced yesterday. (All monetary figures are reported in Canadian dollars.)

Operating income fell 5 percent to $1.3 billion and revenue slipped 9 percent to $2.8 billion, as carloads plunged 12 percent during the quarter compared with Q2 in 2015.

SSA Marine, Melford International Terminal and Cyrus Capital Partners LP announced yesterday the formation of a joint venture that will construct a container terminal as part of the Melford Atlantic Gateway project in Nova Scotia.

The new 315-acre marine container terminal will be built at the Strait of Canso, Nova Scotia, and will become the closest North American port on the circle route to Europe and Asia via the Suez Canal, the companies announced in a joint press release.

CN's board announced yesterday that incoming President and Chief Executive Officer Luc Jobin has been been named a board director. Jobin will take over the company's top executive position on Friday.

Jobin will succeed Claude Mongeau as president and CEO. As a board director, Jobin replaces Mongeau, who announced earlier this month that he would step down from his post due to health reasons.

The Transportation Marketing & Sales Association (TMSA) recently named CN Director of Marketing Innovation Marie-Chantal Savoy its 2016 Marketing Executive of the Year.

The award recognizes a senior-level leader in the transportation and logistics industries who has demonstrated strategic thinking and intelligent execution of marketing initiatives to meet their organization's business goals. The award is part of TMSA's mission to honor the efforts of marketing, sales and communications professionals in the two industries.

The Canadian Environmental Assessment Agency and the Canadian Transportation Agency are soliciting public input on a draft agreement to establish a review panel for CN's proposed logistics hub in Milton, Ontario.

When finalized, the agreement will help establish the panel's mandate and authority, as well as procedures and timelines for the review under the Canadian Environmental Assessment and Canada Transportation Acts, Canadian government officials said in a press release.

— by Pat Foran, editor

I met Claude Mongeau during a May 2004 visit with CN executives in Toronto. At the time, he was CN’s executive vice president and chief financial officer, and leader of the strategic planning process. I talked with him about a range of subjects, from service-plan discipline to strategic planning to continuous improvement. We also talked about culture, or what it was that made CN “CN.”

CN President and Chief Executive Officer Claude Mongeau will step down at the end of June, the Class I announced this morning. Chief Financial Officer Luc Jobin has been named Mongeau's successor effective July 1.

Mongeau said he would leave the post due to health reasons. In January, he returned to work following a six-month medical leave after he was diagnosed with a rare type of tumor in his throat. During the leave, he underwent surgery to remove his larynx.

CN is encouraging communities to submit input for corridor risk assessments along key rail routes that carry significant amounts of dangerous goods, the Class I announced late last week.

CN performs specific risk assessments on rail lines on key routes, looking at factors such as population and emergency response capabilities. Under new Transport Canada regulations, the railroad will incorporate input from Canadian municipalities along those key routes as part of those risk assessments, according to a CN press release.

Evergreen Shipping Agency (America) Corp. has selected CN as its 2015 "Railroad Company of the Year" in recognition of the Class I's consistent level of high performance to customers.

Evergreen selected CN because of its "excellent professional service to our shared customers … and consistent level of performance as a transportation provider," said Evergreen Shipping Agency President Roy Amalfitano in a press release.

CN and city of Montreal officials yesterday announced a plan to strengthen railroad safety efforts.

Montreal Mayor Denis Coderre and CN Executive Vice­ President, Corporate Services and Chief Legal Officer Sean Finn met at the Class I's Montreal headquarters to discuss strengthening their "partnership" on safety matters, according to a CN press release.

CN has been recognized as one of three recipients of this year's Responsible Care Partner of the Year award from the American Chemistry Council, the Class I announced yesterday.

The award recognizes the "strong performance and safety record of companies involved in the transportation, handling and marketing of chemicals," according to a CN press release.

Progressive Railroading and RailTrends® have named CN President and Chief Executive Officer Claude Mongeau the 2016 recipient of the "Railroad Innovator Award," which recognizes an individual's outstanding achievement in the rail industry.


Mongeau joined CN in 1994 and early on held such positions as vice president of strategic and financial planning and assistant VP of corporate development. He was appointed executive VP and chief financial officer in 2000, and president and CEO in 2010.

CN yesterday announced the winners of its annual Safety Handling Awards, which recognize customers that make the safe handling of dangerous goods a top priority.

In a ceremony held yesterday, the railroad honored 141 companies with the award.

CN posted a 13 percent jump in net income in first-quarter 2016 compared with a year ago, but slumping commodity shipments led to a 4 percent decline in revenue for the period.

The Class I yesterday reported first-quarter net earnings of $792 million (in Canadian dollars), or $1 per diluted share, compared with $704 million, or 86 cents per diluted share compared with first-quarter earnings a year ago.

CN announced yesterday that 15,000 employees have completed railway training at its two education campuses since they opened in 2014.

The milestone of 15,000 workers trained "reflects the re-engineering of how CN hires a new generation of railroaders and upgrades the skills of current ones," said CN President and Chief Executive Officer Claude Mongeau in a press release.

CN has recognized 22 of its customers for their sustainability practices that are aligned with the objectives of the CN EcoConnexions program, the Class I announced yesterday.

Under the program, participating companies work to reduce carbon emissions and increase energy efficiency.

CN has launched the third year of its Safety Innovation Program as part of the railroad's broader efforts to improve the safety of operations, the Class I announced yesterday.

For the third consecutive year, CN will step up efforts to use technology to bolster the its Safety Management System, which is designed to minimize risk and reduce accidents and injuries, CN officials said in a press release.

Poor track conditions and maintenance delays led to the May 2014 derailment of a CN train near Fort Frances, Ont., the Transportation Safety Board of Canada announced earlier this week.

The train was traveling from Winnipeg, Manitoba, to Chicago along the Fort Frances Subdivision when it derailed May 23, 2014, according to a TSB press release and the TSB report.

CN late last week announced a public debt offering of $500 million worth of 2.75 percent notes due 2026.

The railroad will use the offering's proceeds for debt refinancing, share repurchases and other general corporate purposes, CN officials said in a press release.

CN yesterday announced details of its 2016 capital spending plan that's projected to total about $2.9 billion (in Canadian dollars).

The railroad plans to spend about $1.5 billion on track infrastructure, including the replacement of rail, ties and other track materials, improvements to bridges and upgrades to targeted branch lines.
 
The Class I also expects to spend $600 million on rolling stock, including the delivery of 90 new high-horsepower locomotives in 2016.
 
Meanwhile, CN plans to invest $400 million in "a range of other key initiatives," including $400 million on the implementation of positive train control technology on portions of its U.S. rail network.