BOSTON — Canadian National is taking a back-to-basics approach under new CEO Tracy Robinson.
The first order of business is to improve the railway’s velocity, which since last fall has generally been running below 2020 and 2021 levels when measured by the average number of miles cars travel per day.
“As we bring the schedule together, it means every car has a plan, every block has a plan, every train has a plan, the meets are all scheduled. And every customer has a plan, including the local service delivery. As we do this, we’re seeing it’s starting to work,” Robinson told an investor conference on Tuesday.
On April 1 CN renewed its focus on making sure trains depart its four hump yards — Memphis, Tenn.; Gary, Ind.; Toronto; and Winnipeg, Manitoba — on time, with the right blocks, and that each block makes its scheduled connection. The program was extended to three flat-switching yards on May 1.
Failures are analyzed, problems are identified, and the operating plan is adjusted as required, Robinson says.
While there are still impacts from COVID-19 and traffic flows remain different than they were before the pandemic, Robinson says CN is starting to make progress, with car miles per day now running ahead of the average of the past two years. Train velocity is rising, as well.
“Our service levels to our customers are getting better and better as we go,” Robinson says. “And I have a bit of a sense of urgency to really try to get this plan worked out over the next couple of quarters … because we’re going to have a very full fourth quarter as the grain starts to come on. We need to be ready.”
CN also is more tightly coordinating its operations, marketing, and finance functions to ensure that it can handle any new business it takes on. In some places, CN has oversold its capacity, Robinson says, while in others there’s capacity it can sell into.
CN wants to be careful with its BC North Line to the growing Port of Prince Rupert, British Columbia, for example. Robinson says CN needs to consider how much of the single-track line’s capacity should be reserved for international intermodal, as well as grain, energy products such as coal and propane, and merchandise such as forest products.
“You need to be intentional about that, and to build our book in such a way that we can deliver to our customers,” she says. “We want to be able to deliver what we sell.”
The integrated approach is essential for CN to handle traffic growth and turn it into more revenue and higher profits. “It wasn’t as integrated, I would argue, in the last few years,” Robinson says. “That’s what’s caused some of our issues. When you think about this, you can’t operate in silos.”
CN’s top executives will be making decisions about how to bring traffic on at the right price and with the right resources so that operations remain fluid and service is reliable.
Robinson, who spent 27 years at Canadian Pacific before leaving for the energy sector, was asked what CN needs to do to protect its interests as the proposed CP-Kansas City Southern merger goes through regulatory review.
CN must remain focused on growth and operations, she says. “What I know, from being across on the other side of the fence, is that when this place is running the way it should run, it’s pretty tough to compete with,” she says.
Robinson spoke at the Bank of America 29th Annual Transportation Conference.
“Right car – Right train – On time departure – On time line of road”. Sounds like all the items measured by UP’s Transportation Control System. From 20 years ago. My guess is that same system still exists. It has meaning if management follows its directions.
Sounds nice, isn’t it? I expect CN to have some success this Summer, maybe lasting into Fall. Then they’re gonna fall on their face again as Winter weather sets in. How do I know? Because that’s what’s been happening for the past 22 years or so, and nobody at management is learning. (Those who do either get terminated or leave in disgust.)
CN keeps running underpowered trains that are too long, too heavy, that have a poor distribution of loads and empties, that have too many blocks and scheduled work enroute, that will take forever to pump in sub-zero weather. If , the train ever gets going and does not break a knuckle somewhere, the engineer will have to deal with notch restrictions that will make the train stall on a minor grade. Eventually, nearly all trains on the line will delay each others and eventually die on the road as their crews run out of hours. If the crew caller is lucky, it may even find an available relief crew to move one train; for the others, the dead crew will board their train back where they left it, after they get their 8-hours rest in a comfortable company bunk or brown-colored motel.
Local assignments will again be used to clear yards of snow and shuffle cars around to make room for more inbound cars, instead of making deliveries and pickups to customers. The railroad would operate much more fluidly if it didn’t have those pesky customers to take care of.
I know this because that’s how CN has been operating since the Great Hunter Harrison completely wrecked its operations, starting in 2000. And they call it Precise, Scheduled and even Railroading. World Class operations.
Nice write-up, Bill!
One does have to ask (and Tracy has no doubt asked), “How did CN (on particular) and other Class I’s *lose* focus on these fundamental tennents of PSR?
I agree with the other commenters that while 210 miles a day (from less than 150) does represent incremental progress, there is a long way to go!
“As we bring the schedule together, it means every car has a plan, every block has a plan, every train has a plan, the meets are all scheduled. And every customer has a plan, including the local service delivery. As we do this, we’re seeing it’s starting to work,” Robinson told an investor conference on Tuesday.
This sounds like the true definition of “Precision Scheduling” to me rather than what most railroads call PSR. The hard part is to adhere to it in spite of unexpected events or trying to meet unrealistic operating ratios to please wall street. It also requires a willingness to invest some of the profits in spare capacity to meet unexpected growth or emergency situations. Looking at the recent improvement in car miles per day since the start of this year, it looks like it is starting to work. Since my wife owns CN stock in her Roth IRA, I’m glad to see it
So assuming 49MPH track speed on the mainline, a car is in motion less than 6 hours per day. And they call that progress? A car travels one division or district and a few miles on the next in 24 hrs. No wonder they can’t handle any uptick in business.
But this is car travel time, from the time the car is released for pickup at its loading point origin to its final destination. Local train pick up, taken to classification yard, assembled into a road freight, few stops along the way, reclassified onto another road freight dropped off at a regional classification yard, onto a local freight and dropped off at the destination customer, up to 3000 miles away. It’s just not over the road time, it’s the two or three days at each end that causes the appearance of such slow travel.
And the PSR hassles to slow it down more.
240 MILES A DAY? And he is happy with that? Hell of a way to run a RR.
I think we need to put things in perspective here, 240 miles a day system wide, east coast to west coast to the Gulf of Mexico. The sub division I live beside runs from Toronto to Sarnia / Port Huron, Michigan, one crew district, call it 200 miles. Then through the tunnel and off to Flint, Battle Creek, and around the bottom of Lake Michigan and off to International Falls, Minnesota.
Not sure how the other class ones due system wide, would be nice to know.
I bet the people who work for her don’t think she’s happy with it.
So average car velocity is an amazing 8.75 miles per hour!!! And this is something to cheer about?
These are a set of goals. Not a plan to achieve the goals. Time will tell if the goals are met, not a press release.
I noticed no mention of adding capacity where traffic growth is projected. Only that growth would be managed by targeted pricing of their service. As a business model this strategy is logical but in the long term the result is an ever shrinking rail share of the transportation of goods. Increased rail capacity, including surge capacity, is very much needed.