Canada's rail businesses invest $1.5 billion in capital additions to support growth and service improvements

Industry posts improved safety performance, increased fuel efficiency

OTTAWA, Dec. 29 /CNW/ - Canadian railways have prepared for the current economic rebound with sizable industry investments to support greater efficiencies and improved customer service the Railway Association of Canada (RAC) reported today. 

Traffic improved in 2010 with weekly carloads continuing to show strong gains for Canadian railways from 2009 levels. Cumulative volume in mid-December reached almost 3.6 million carloads, up 17 percent from last year. "The rail industry is hopeful of continuing economic growth with robust traffic levels. We're ready to help move Canada's economy forward," said RAC President Cliff Mackay.

In its 2010 Railway Trends annual report the RAC noted that in 2009 Canada's rail businesses invested $1.5 billion in capital additions to property, a $133 million or almost 10 per cent increase over 2008. This is the first time in history that railways increased capital spending during an economic downturn. Plant modernization programs included expenditures to upgrade infrastructure, acquire locomotive, freight and passenger cars, and purchase new information technology.

Expenditures of $706 million on track and roadway additions represented almost half of total spending. The second highest capital additions category involved rolling stock additions, with $317 million a $27 million, or 9.3 per cent, hike in spending compared to 2008 and $54 million, or 20.5 per cent more expenditures, than in 2000.

"Capital programs for the renewal of rail infrastructure and the acquisition of rolling stock and other investments contribute to growth opportunities as well as to improving rail's productivity and the fluidity of rail networks," Mackay said. "Railways finance, maintain and pay taxes of their networks, investing an average of 20 per cent of revenue in total capital projects annually to provide quality service and to improve transit times for customers who benefit from some of the lowest freight rates in the world.

"That's why regulatory stability and certainty are essential to a financial environment in which significant rail investments can be confidently made to support the continuing importance of rail in the 21st century as the backbone of a cost-effective, efficient and reliable transportation supply chain and to move the Canadian economy," Mackay continued.

Traffic down
Railways were affected by the global economic slowdown in 2009, which reduced shipments as well as intercity passenger, rail commuter and tourist train travel.

With the exception of agriculture and manufactured and miscellaneous goods, the movement of freight goods fell 11.1 per cent year-over-year, with the most severe declines coming from lower minerals, metals and intermodal volumes.

The number of passengers travelling on intercity trains in 2009 fell 7.4 per cent from the prior year level. Commuter train ridership declined 1.6 per cent.

Total industry revenue of $9.6 billion declined $1.6 billion, or 14.3 per cent, year-over-year. Freight revenue, the largest component of industry revenue, fell $1.5 billion, or 15.2 per cent, to its lowest level since 2004. The decline in passenger revenue was less severe, down $34 million or 5.1 per cent from 2008. Other revenue for 2009, almost totally generated by freight rail, experienced a $40 million or 6.9 per cent reduction from the year prior.

Total operating income of $1.2 billion fell $0.8 billion or 38.6 per cent in 2009 compared to 2008 as the $1.6 billion revenue decline was only partially offset by the $0.8 billion reduction in operating expenses. The industry recorded its lowest operating income of the past decade.

Improved safety
The industry achieved noteworthy improvements in its safety statistics in 2009, by both freight and passenger rail.  Compared to 2004, freight rail lowered the number of federally and provincially-regulated freight rail-related accidents by a third to 1,121 accidents in 2009 from 1,681 accidents in 2004. The accident rate, representing the number of freight train accidents, fell to a five-year low of 2.8 in 2009 from 3.8 in 2004, an impressive 26.3 per cent improvement.

Passenger rail recorded 67 train accidents in 2009, down from 80 accidents in 2004. The number of accidents per million passengers/commuters tumbled to 0.95 in 2009 from 1.35 in 2004, a remarkable 40 per cent improvement.

Environment - efficient, effective, sustainable
Rail industry fuel expenses fell a remarkable $820 million or 40.4 per cent in 2009 from the year earlier. Two factors were responsible for this result - consumption declined by 14 per cent, and the price of fuel fell by more than 30 per cent. The decline in fuel consumption exceeded the reduced workload of the industry, underscoring the success of the industry's ongoing fuel conservation practices.

The industry's ongoing renewal of its fleets, replacing older locomotives with higher horsepower, more fuel-efficient locomotives, contributed to strengthening rail's position to meet the challenge facing Canadian communities and industries by offering environmentally sustainable transportation today and into the future. Currently, the transportation sector, the largest single source of GHGs, contributes 27 per cent of GHGs produced in Canada.  Canada's rail business moves 75 per cent of the surface freight on a tonne-kilometer basis but produces only three percent of transportation sector GHGs.

"Our significant investments and innovations are strengthening the backbone of the transportation system, making it safer and more secure to ensure the Canadian economy successfully grows by providing our customers with easy access to national and international markets to compete in the 21st century and move the Canadian economy," Mackay concluded.  "We are doing so in an environmentally efficient way that benefits our communities by relieving road congestion and helping to limit harmful emissions that cause harm to our environment." 

About the Railway Association of Canada
The Railway Association of Canada represents some 50 freight, tourist, commuter and intercity Canadian railways, their more than 35,000 employees, and over 45 associate suppliers and partners. Rail moves more than 70 million people and 75 per cent of our nation's goods annually in an environmentally sustainable manner, generating only three per cent of the transport sector's greenhouse gas emissions. 

SOURCE Railway Association of Canada

For further information:

Paul Goyette, Railway Association of Canada, Tel.: 613 564-8097

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