Montreal, Quebec-headquartered Canadian National Railway (CN) has announced plans to invest C$20 million to increase its cold supply chain capacity in North America.
“CN was the first railway to introduce highway-to-rail conversion of reefer service in trans-border markets. Our high-quality cold supply chain service has been embraced by the marketplace,” stated J.J. Ruest, executive vice president and chief marketing officer. “We are now adding capacity to grow and help Canada’s food processing industry gain and maintain access to new domestic and international markets.”
The investment will include the purchase of 200 or so 53-foot temperature-controlled containers as well as the acquisition of 32 electrical generators to move 40-foot marine reefers to and from CN-served ports on the company’s intermodal trains.
CN serves Canada and the midwestern and southern United States, with access to over 75% of the US population and all major Canadian markets. The company, which has 22,000 employees, is the largest railway in Canada in terms of both revenue and physical size of its track network, which spans the nation from the Atlantic coast in Nova Scotia to the Pacific coast in British Columbia.
CN’s net income for the second quarter of 2015 was C$886 million. Operating income increased eight per cent to C$1,362 million, while revenues were flat at C$3,125 million. Car loadings during the period decreased by three per cent to 1,414 thousand, and revenue ton-miles declined by seven per cent.
Foreign Currency Impact on Results
Although CN reports earnings in Canadian dollars, a large portion of its revenues and expenses is denominated in US dollars. The fluctuation of the Canadian dollar relative to the greenback affects the conversion of the company’s US dollar-denominated revenues and expenses. On a constant currency basis, CN’s net income for the second quarter of 2015 would have been lower by C$64 million.