Canada’s two main railways face a bleak year ahead as a looming recession weighs on freight volumes.
Carloads fell more than 17 per cent year over year last week, part of a growing decline in shipments since the start of the year and accelerated by the COVID-19 pandemic, according to the Association of American Railroads.
Volumes at Canadian National Railway Co. and Canadian Pacific Railway Ltd. will likely be “severely impacted in the coming months” as industrial supply chains remain shut down and retail harshly curtailed, National Bank analyst Cameron Doerksen said in a research note.
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“There is no question in our mind that freight volumes in the next few months are going to be severely depressed with no real historical precedent,” he said.
Automotive shipments and container traffic have been hit particularly hard after North American and Asian production hubs went into lockdown due to the virus.
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Year over year, auto and container volumes decreased by more than 15 and 12 per cent respectively in March, with container traffic seeing its steepest plunge since 2009. CN carloads of vehicles and auto parts fell 90 per cent last week,