Leading Canadian freight railroad company, Canadian National Railway Company (CNI - Analyst Report) announced last week that it will lend its support to developments at Halifax Port so as to make it more competitive in the current market. The company’s association with Halifax Port Authority, which dates back to 2010, and alliances with terminal operators such as Halterm Container Terminal Ltd. and Cerescorp Company Ltd., hold testimony to its commitment to form efficient supply chain for customers.
We believe the company’s commitment toward infrastructural development stems from its focus on maintaining high railroading (velocity, reliability, lowers costs and asset utilization) standards. In addition, Canadian National is continuously seeking productivity initiatives to reduce costs and leverage its assets.
The company equipped its locomotives with advanced technologies like Trip Optimizer and Wi-Tronix to increase fuel efficiency. It also seeks a 2–4 year capacity improvement plan to boost productivity.
Canadian National expects a capital investment plan of C$2 billion for the year. Approximately, C$1 billion of this would be spent on developing railway track infrastructure to enhance business networks. Further, the company aims to direct C$700 million of the total on market expansion to increase distribution centers and construct intermodal terminals.
Moreover, it will spend approximately C$200 million on the purchase of locomotives, intermodal equipment and vehicles. In 2013, Canadian National expects to purchase 40 new and 37 second-hand high-horsepower locomotives. The company expects an additional C$100 million expenditure on the upgrade of infrastructure in order to increase network capacity in the Western Corridor.
Canadian National, which operates with its Canadian counterpart Canadian Pacific Railway Ltd (CP) and other railroaders like CSX Corp. (CSX - Analyst Report) and Union Pacific Corp. (UNP - Analyst Report) has a Zacks Rank #3 (Hold).