CPKC income higher as revenue sets new second-quarter record

Volume was up 4% for the quarter when based on revenue ton-miles, CPKC’s preferred metric, but flat when measured by carloads and containers. “During the quarter, we established volume records in grain; energy, chemicals, plastics; and automotive,” Creel said.

CPKC’s key operating metrics all improved compared to a year ago, when the railway was experiencing congestion on former Kansas City Southern territory in the U.S. following a computer system cutover. Average train speed increased 7% for the quarter, while terminal dwell was down 16%.

Chief Operating Officer Mark Redd says the railway set second-quarter records for average train speed, dwell, locomotive productivity, and fuel efficiency.

CPKC has received all 70 Wabtec ET44AC locomtoives scheduled for delivery this year and soon will be receiving the first units of its order for 65 EMD SD70ACe-T4s from Progress Rail, Redd said.

Chief Marketing Officer John Brooks said Canadian grain volume was up 24% thanks to a record harvest and continued growth in shipments to Mexico. U.S. grain volumes, meanwhile, were up 14%, driven by strong demand in Mexico and exports via the Pacific Northwest.

Coal was a different story. Volume declined 29% amid production challenges at southern British Columbia mines. The decline was steep enough to reduce CPKC’s overall revenue growth by 3% during the quarter, Brooks said. Coal production is recovering but volumes will remain challenged for the rest of the year.

Despite the impact of high interest rates and lower housing starts in the U.S., CPKC had a record June for lumber shipments, Brooks says, while steel volumes improved in both domestic and land-bridge lanes linking Canada and Mexico.

Domestic intermodal volumes increased 3%, with the cross-border SMX interline intermodal service linking Mexico and Texas with terminals on CSX (NASDAQ: CSX) up 30% compared to the first quarter, when dedicated stack trains were launched using the new interchange at Myrtlewood, Ala., on the former Meridian & Bigbee short line.

“We are seeing signs of improving truck to rail conversion opportunities supported by higher fuel prices, tighter regulatory enforcement, and reduced trucking capacity,” Brooks says.

The railway’s employee injury rate increased 32% for the quarter, while the train accident rate rose 3%. “While we are disappointed by these results, we remain fully committed to continuous improvement,” Redd says. “Safety is a journey that requires constant diligence, learning, and engagement. We’re taking action to address the underlying trends and remain focused on ensuring every employee returns home safe.”

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