CN Foresees Robust Grain Crop
Leading Canadian rail freight carrier, Canadian National Railway Company (CNI) has forecasted robust growth in West Canadian crop production of over 60 million tons. The forecast is suggestive of the highest crop production, which will likely bolster agricultural shipments of Canadian National.
Canadian National remains focused on enhancing its supply chain that can provide network fluidity and efficiency to meet increased demand.
Apart from agricultural crop, Canadian National’s other business segments are expected to support revenue growth, with Intermodal, Crude and Automotive being the primary contributors.Intermodal growth is likely to be driven by international and domestic businesses. International business growth will be backed by increased shipments through the Port of Vancouver and the Port of Halifax as well as the new terminals in Joliet, Illinois and Indianapolis, which recently started operations.
Domestic Intermodal business will be driven by increased demand from industrial customers like Chemoil, direct retail programs and introduction of services to underserved areas like Saskatoon. New terminals coming up for loading and offloading crude shipments will aid crude business, especially in the North American energy markets.
In addition, higher revenues are expected from the upcoming markets for frac sand, pipe and construction aggregate.The company also announced in July that it will serve a new frac sand terminal in northwestern Alberta with capacity of approximately 550,000 tons per year. In July, the company also announced that it will serve a new frac sand terminal in northwestern Alberta with capacity of approximately 550,000 tons per year. Further, Automotives will continue to grow on higher North American auto production.
Canadian National, which operates with other railroads like Canadian Pacific Railway Ltd (CP), CSX Corp. (CSX) and Norfolk Southern Corp. (NSC), has a Zacks Rank #3 (Hold).
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