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CN expects to benefit from trucker vaccine mandate

Home News CN expects to benefit from trucker vaccine mandate

CN expects to benefit from trucker vaccine mandate

Fourth-quarter 2021 revenue up 3% despite British Columbia track washouts

The driver shortage, which some observers say has exacerbated by the U.S. and Canadian vaccine mandates restricting truck drivers’ cross-border movement, will benefit CN as current and prospective customers seek rail as a freight alternative to trucking, executives said during a call with investors late Tuesday afternoon to discuss fourth-quarter 2021 financial results.

“The driver shortages and the lack of truck capacity are things that are boding well for us to pick up some volume” as the trucking market deals with the vaccine mandates, said Keith Reardon, CN senior vice president for the consumer product supply chain.

“Just this past week, we saw a big uptick in those discussions with our retail customers, our TransX customers and our wholesale customers. So, the opportunities are definitely there. Just not sure how to quantify that. But the opportunities are there and we’re going to work with our customers to offer them services. We have the capacity on our trains.”

With an anticipated demand for rail service come expectations that there will be a “strong pricing environment for 2022 and beyond,” said James Cairns, CN senior vice president for the rail-centric supply chain.

CN (NYSE: CNI) expects volumes to grow in 2022, particularly in the second half of the year as it moves an anticipated robust grain harvest for domestic use and export. The railway plans to hire in preparation for the fall’s rail service needs and to account for attrition, according to COO Rob Reilly.

Among the other items that CN expects this year is ramping up grain and coal volumes as well as international imports to and from the Port of Vancouver. Severe flooding in British Columbia last fall washed out CN’s main line from mid-November to early December, resulting in between CA$120 million and $130 million (US$95 million and $103 million) of revenue that couldn’t move, according to CN CFO Ghislain Houle. The railway is still catching up on moving those volumes in the first quarter of 2022 because CN also dealt with a cold snap in December, he said.

For full article, click here.

Source: Freight Waves

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