Canadian National orders 75 locomotives to handle traffic growth

MONTREAL — Canadian National has ordered 75 locomotives for delivery this year and next in order to handle projected traffic growth.

CN, which made the announcement on Monday during its quarterly earnings call, is the only Class I railroad to place a locomotive order this year. The railway’s board approved the order before CN made its bid for Kansas City Southern. “It had nothing to do with the merger,” Chief Operating Officer Rob Reilly says.

“It’s really based on growth and growth prospects we see over the next 12 to 24 months,” Reilly says. “In terms of timing, we expect to get roughly 25 of those here in the second half of this year, the other 50, first half of next year.”

CN could adjust the timing of the deliveries if volume growth exceeds expectations. CN, which boosted its volume outlook on Monday, now expects traffic to grow between 7% and 9% this year as the economic recovery accelerates.

“As we see growth coming, we want to be prepared for it,” CEO JJ Ruest says. “We want to be able to move the economy and do our part to enable the recovery post COVID.”

CN executives did not disclose which manufacturer won the railway’s order for new power. A railway spokesman did not immediately return an email seeking comment, and a Wabtec spokesman deferred the question to CN.

CN’s last locomotive order, for 60 ES44AC units, was placed with Wabtec predecessor GE Transportation in September 2018, expanding the railway’s 200-unit order that dated to December 2017.