Blockades, virus expected to derail CN’s Q1 results

MONTREAL — Analysts expect Canadian National Railway Co.’s first-quarter freight volumes to take a hit due to rolling blockades that halted rail traffic across large swathes of the country in February.

The blockades came on top of lower container volumes from China following production shutdowns triggered by the COVID-19 outbreak, but hefty crude-by-rail shipments helped offset the declines.

CEO JJ Ruest has said the deep slump in Chinese production and Canadian auto manufacturing was narrowing the flow of goods to and from Canada, hurting business at the country’s largest railway in spite of strong demand for grain and other bulk commodities.

Analyst Walter Spracklin of RBC Dominion Securities says the blockades last winter dented volumes and pushed up its operating ratio, a metric that calculates operating expenses as a percentage of revenue.

CN shut down its eastern network on Feb. 13, one week into a blockade by Tyendinaga Mohawk protesters that cut a key rail link east of Belleville, Ont.

Provincial police cleared the demonstration at the end of February, which was part of a slew of pop-up blockades across the country launched in solidarity with Wet’suwet’en hereditary chiefs who oppose a natural gas pipeline slated to pass through their traditional territory in British Columbia.