Demand for Canadian grains and specialty crops were one of the “bright lights” for Canada’s railway carriers in an otherwise subpar 2009, according to the Railway Association of Canada.
“From all signs, the decline in freight rail traffic hit bottom during this summer and has begun to rebound,” RAC CEO Cliff Mackay said in a year-in-review press release Wednesday. “It may take a couple of years for the business to rebuild to the peaks of the mid-2000s.”
Signs of improvement could be seen in the number of locomotives and freight cars brought out of storage toward the end of 2009 to handle an uptick in business, according to the RAC, which represents 54 Canadian rail companies including CN, CPR and Via Rail.
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Promising new business for the railways includes ethanol and wood pellets being used in electricity-generating plants, the association added.
Overall, rail freight carriers in Canada saw their traffic drop by more than 25 per cent during the first half of 2009 as recession cut into overseas demand for coal, sulphur and other export commodities, and into the movement of containerized goods in and out of Canada.
Looking ahead, the RAC said, one unknown for the rail industry is what commitments Canada will make toward an international agreement on cutting carbon emissions.
“Many observers think the industry’s favourable environmental footprint, such as an agreement with government to cut locomotive emissions and its ability to take people and freight off congested highways, positions it to gain traffic during an economic rebound.”
The railways are also expected to see a boost when the federal government’s infrastructure expansion and economic stimulus programs find their full stride during 2010, the association said. The programs “could bring more business to the railways hauling materials for construction projects across the country.”
For Via Rail and the country’s commuter rail operators, the RAC said, 2009 brought “needed financial injections” from government, expected to help meet the expectations of a growing number of customers.
“Inter-city, commuter and tourist traffic totaled 72.3 million passengers in 2008, and is still growing,” Mackay said.
By comparison, the railways hauled 237.3 billion revenue ton miles of freight, down 4.2 per cent, during 2008, the association said in a previous release Dec. 1.
“Containers in domestic and international service are the fastest growing rail freight commodity segment,” the RAC said in the Dec. 1 release. “Carload revenue from minerals, fuels and chemicals, agricultural products and metals are the next leading commodities.”
