TRAINS Magazine published an article that was highly complimentary of the CNR that Paul Tellier brought into profitability and efficiency. But at what cost? Was profitability gained at the expense of maintenance of right-of-way, rolling stock, and structures? The derailments experienced by the railroad in recent months and other, not reported evidences of deferred maintenance, would suggest that timely maintenance was and is not being supported by management. Perhaps it is a good thing that BNSF didn’t merge with the CNR.
Oh, it’s definitely a good thing…that would be the end of our favorie unique units, like the SD50F, maybe…plus, not enough class 1s as it is…
800th post!
Matthew
That depends upon whose philosphy survives the merger process.
How do BNSF, CN and CP’s philosophies differ?
What?!? Class I’s defering maintenance to sex up the ol’ balance sheet?!?
Tale as old as time…
Yeah…right. CN is taking a terrible beating…
CN bottom line tracks higher
(The following article by Paul Delean was posted on the Montreal Gazette website on October 19.)
MONTREAL – Canadian National Railway is still on a roll. Despite the negative impact of hurricanes, higher fuel costs, a couple of major derailments and an appreciating Canadian dollar, the nation’s largest rail transporter yesterday reported record third-quarter earnings of $411 million for the three-month period ended Sept. 30, a 19-per-cent improvement from a year ago.
“From a financial standpoint, it was an outstanding quarter,” president and CEO Hunter Harrison said.
“The model is clearly working. The railroad’s running as well as I’ve ever seen it run.”
Revenue for the quarter rose six per cent to $1.8 billion through a combination of higher freight rates (including a boosted fuel surcharge) in Canada and the U.S. and double-digit growth in the grain, fertilizer, coal and intermodal sectors.
The company said favourable income-tax adjustments and other income helped offset $28 million in uninsured expenses stemming from a 43-car derailment that dumped heavy oil and hazardous chemicals near Wabamun Lake, Alta., in early August.
In July, four CN employees died in a the head-on collision of two CN freight trains in Mississippi. That crash is still under investigation.
“These incidents put a chilling impact on this organization,” Harrison told analysts in a conference call yesterday. “It’s hard to be pleased with a quarter when you face those kinds of issues.”
The company said its operations on the U.S. Gulf Coast were affected by the recent hurricanes, with petroleum and chemical revenues down because of soft market conditions and reduced production in the region.
But increasing coal, grain, forest products, fertilizer and mining shipments, particularly in Western Canada, more than compensated and made f
I have seen allegations that CN is defering maintenance, but the quality of evidence presented makes it pretty speculative. Train wrecks, as bad as some of them might be, don’t necessarily mean that the overall level of maintenance is deficient.
CN’s financial success can be attributed to many factors. Just for one, there is no expense for medical coverage for Canadian employees. At $10,000 per employee, that is no small amount of change.
Jay
I have seen no concrete evidence of deferred maintenance or other questionable practicies, although such allegations do appear from time to time on this forum and in other places.
This is not to say that there isn’t maintenance needed. There is – but this is no different from any other of the Class Is and is at least partly attributable to the increase in traffic and loadings which was, I will grant you, not fully anticipated by any of them – however much it has been welcomed!