CN capital spending on maintenance holds steady

Written by Staff and newswire report
CN double track
Despite bad winter weather and restrictions on Canadian canola exports to China, CN moved more grain than ever before.
Canadian National

CN will invest approximately a record $2.94 billion (C$3.9 billion) in its capital spending program. But only $1.2 billion (C$1.6 billion) is targeted toward track and railway infrastructure maintenance — the same as was spent in 2018.

“In 2019, our record capital program of C$3.9 billion will be focused on investing in the renewal of a more efficient and reliable locomotive fleet, adding network capacity to accommodate our solid pipeline of growth in diverse markets and bringing technology to our Precision Scheduled Railroading,” JJ Ruest, CN’s president and chief executive officer, said in a written statement

Some additional details on CN capital spending were made available to attendees at the NRC Conference in Marco Island, Fla., earlier this month.CN capital spending

Notable items included that:

  • Tie replacement will drop 10 percent in 2019, according to Jim McLeod, CN’s chief engineer for structures, design and construction. McLeod told the NRC conference the railroad would replace 950,000 ties this year. But that on a “steady state basis, (CN is) ideally looking to replace 2.1 million ties overall annually, taking into account the higher traffic density.”
  • Mainline basic track maintenance investment is expected to decline 5 percent in 2019 to $840 million from a year earlier.
  • The railroad plans to replace 369 track miles of rail this year, a drop from the 383 miles seen in 2018.
  • The railroad is investing $65 million in its strategic bridge initiative this year, well above the $45.6 million seen in 2018.

The Class 1 also plans to add nearly 80 miles of double track this year, well up from the 50 miles seen in 2018.

CN also plans to roll out fully automated track inspection this year. Phase One involves use of eight track inspection boxcars continually inspecting 4,800 miles of key core mainline track. The railroad is also adding inspection portals in multiple locations. Those portals are designed to detect damage and wear on locomotives and rail cars, as well as to collect data on usage.

Capital spending on positive train control (PTC) projects is expected to be $226 million (C$300 million) this year, well below the $301 million (C$400 million) of 2018.

News of CN’s capital spending plans came as the company reported positive earnings for the fourth quarter and full year. Revenue for 2018 rose 10 percent to $10.78 billion (C$14.3 billion). “With approximately C$1.3 billion of revenue growth in the final three quarters of the year, CN regained its position of strength and demonstrated again its ability to grow at low incremental cost,” Ruest said.

Categories: Ballast, Ties, Rail, Bridge/Retaining Walls/Tunnels, Class 1, Freight, News, Track Structure
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