Status of the Railroad - A Message from Kenny Rocker, EVP, Marketing & Sales

Announcement Number: CN2023-59
Categories: General Announcements
Posted Date: October 27, 2023

To Our Customers,

As October comes to an end, I wanted to update you on the status of our network. Demand has been challenged in certain pockets of our business, but we are fortunate to have a diverse portfolio of customers and are seeing gains in some industries that we serve. The key is to focus on the things that we can control and – the service that we provide you. With our improved service product, we’re striving to deliver the service that we committed to provide as well as pursuing new growth opportunities to help you win with your customers. In fact, this past week I’ve been in Asia visiting with our international customers. I value these face-to-face meetings that give me the opportunity to stay abreast of current market conditions and connect with you to help grow your business.

I’d be remiss if I didn’t talk about the challenges we’re facing on our cost side. We are all seeing inflationary pressures at both home and work. And the new labor agreements that I mentioned in my last letter have significant impacts to our costs as well. But we believe these new agreements provide a better quality of life for our craft professionals, which in turn, provides you with a more improved service product.

Our Metrics
Here are our latest weekly metrics reported to the Surface Transportation Board (STB) on October 20. These metrics are compared to performance in mid-April 2022, and are based on the STB definitions for industry reporting:

  • Car Velocity: Improved 19% to 211 miles per day.
  • First Mile, Last Mile: Improved 3 points to 93%.
  • Trip Plan Compliance (TPC):
    • TPC Bulk (unit train): Improved 23 points to 89%.
    • TPC Manifest: Improved 18 points to 77%.
    • TPC Intermodal: Improved 16 points to 89%.

Developing New Product Offerings
As we work collaboratively to grow our business together, we continue to listen to your evolving needs in the marketplace and respond with innovative solutions. I’m excited to share that we developed a more competitive intermodal service from Mexico to the Southeast U.S. with Ferromex and our Eastern interline partners. We have a great franchise to leverage, coupled with strong relationships to provide you with more optionality to compete and win in the marketplace.

Investing for Growth
And speaking of growth, we continue to make record capital investments to increase capacity for our customers and harden the infrastructure across our 32,000-mile network. This year we plan to spend $3.7 billion, the highest we’ve seen in seven years. So far this year we have replaced three million railroad ties and over 400 miles of rail to keep the network running smooth. We are investing a significant amount in freight cars and increasing capacity across our network, including enhancements at our intermodal terminals to not only add capacity, but also make it easier for customers to do business with us.

In addition, we continue to expand our reach through transloading. We recently completed significant infrastructure enhancements at Loup Logistics’ Colton transload facility, managed by Mountain Reload. Loup has also expanded their partnerships with the following best-in-class transload operators: MHX LLC in Portland, Oregon and Tacoma, Washington; Jaguar Transport in Dallas, Texas; and Savage in Odessa, Texas.

Thank You
We appreciate your business every day. The team is committed to working together with you to provide a safe, reliable service product to help you compete in the marketplace. This is reinforced with the company’s focus to move faster, be more productive and responsive to our customers.

Small | Kenny Rocker Signature
Kenny Rocker
Executive Vice President, Marketing & Sales