Industrial Info Tracks Canadian Rail Projects

Researched by Industrial Info Resources (Sugar Land, Texas)--The direction of Canada's rail industry is still uncertain. Canadian freight railroads' chances of growing revenue and traffic this year are still up in the air. Industrial Info Resources is tracking two freight rail projects in Canada worth US$200.3 million.

The U.S. presidential election didn't provide much clarity on the economy's direction or business climate in Canada after a mostly sluggish 2016 spelled traffic drops and revenue declines for the rail industry. The industry is still haunted by President Trump's proposal to revisit the North American Free Trade Agreement (NAFTA). It is still uncertain whether NAFTA revisions would affect rail commerce.

The U.S. dollar is relatively strong and there is a continued soft demand for consumer goods, specifically those shipped via intermodal containers that would keep life going for Canada's rail sector. But relatively low natural gas prices have made the U.S. a producer of low-cost industrial chemicals and plastics, providing the railroads opportunities to grow.

Potential further declines in coal and petroleum markets would have a negative impact on rail carriers this year. As long as the country, as a whole, continues to spend money on roads, bridges, airports and other projects, then the railroad industry will be moving more construction supplies, thus keeping them in business and pushing forward with expansion projects and new rail lines.

Industrial Info Resources is tracking two rail projects in Ontario. In Brockville, Ontario, by Protocol Biomass Corporation plans to build a $12 million grassroot fuel pellet rail load-out terminal, which will include 40 new rail cars. The project is due to kick off construction in third-quarter 2017 and to be completed in the first quarter of 2019.

In Milton, Ontario, Canadian National Railway Company (NYSE:CNI) (Montreal, Canada) plans to build a $188.3 million grassroot intermodal and logistics hub. The hub will be capable of handling four trains per day, and 350,000 containers per year. Construction is expected to kick off in third-quarter 2017, with completion in early 2019.

Canadian National Railway is targeting C$2.5 billion (US$1.9 billion) in 2017 capital investments according to CN Canada News. The railway plans to replace 2.2 million rail ties and install more than 600 miles of new rail, as well as perform general maintenance. The railway also plans to invest C$400 million (US$300 million) in 2017 to advance the implementation of Positive Train Control (PTC), the U.S.-mandated safety technology, along parts of its U.S. network. Canadian National Railway will install the hardware on approximately 3,500 route-miles and plans to invest a total of $1.2 billion on the entire project by 2020. Approximately C$500 million (US$375 million) is expected to be spent on equipment, expansion projects and information technology initiatives to serve growing business, improve service for customers and advance safety. This will include planned growth investments to capitalize on Canadian west coast port expansions, key customer projects and safety technology investments, such as wayside inspection systems and track testing vehicles.

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