Photographer: Luke Sharrett/Bloomberg

CN Rail New CEO Apologizes to Customers, Vows Better Service

Updated on
  • Ruest says railroad hasn’t met expectation of grain clients
  • Railway is leasing more locomotives to boost Canadian capacity

Canadian National Railway Co.’s new leader vowed to clear backlogs that have angered customers and to speed up service immediately by deploying additional resources.

“We apologize for not meeting the expectations of our grain customers, nor our own high standards,” interim Chief Executive Officer Jean-Jacques Ruest said Wednesday in a statement. “We can and we will do much better, and that starts today –- no excuses.”

Ruest took over from Luc Jobin on Monday after the railroad struggled to cope with a surge in freight volumes, which slowed operations. Canadian National recently earned a public rebuke from key customer Halliburton Co., which said rail service delays would hurt earnings at the oilfield-services company.

Shipping performance at carriers such as Canadian National has “steadily deteriorated” since winter began and farmers in the country are “seriously concerned” about the state of rail service, according to a March 1 statement by the Canadian Federation of Agriculture, which represents farm groups across the country. The statement cited data from the week of Feb. 11, when Canadian National supplied only 17 percent of rail cars ordered by grain companies.

Employee Incentives

Canadian National said Wednesday it’s offering incentives for “key operating employees” to delay retirement and postpone vacations, and for recently retired staff to return to work. The company also leased 130 locomotives to boost capacity in Western Canada, almost all of which are now operating.

Vowing to fix its service problems, Canadian National said in January it would boost its 2018 capital-spending budget to a record C$3.2 billion ($2.5 billion) and hire about 400 conductors in the first quarter alone. The company in December said it would buy 200 locomotives.

More than C$250 million of the capital-spending budget for this year will go to building new track and yard capacity in Western Canada to increase service for future grain crops, Canadian National said Wednesday.

“The entire CN team has a sense of urgency and is fully focused on getting it right for farmers and our grain customers, regaining the confidence of Canadian businesses, and protecting Canada’s reputation as a stable trade partner in world markets,” Ruest said.

Canadian National said it delivered 4,577 empty hopper cars last week, a 35 percent increase from the February average of 3,400. All available hopper cars are in service, and the carrier said it would progress toward 5,000 a week by the end of March.

— With assistance by Jen Skerritt

(Updates with comment from farm group in fourth paragraph.)
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