CN Rail CEO: COVID-19 impact already being felt on Chinese imports
The head of Canada’s largest railway is confident that his company can make up lost ground from recent blockades and achieve its full-year targets.
“A reference I can give is that when we had the labour stoppage back in November, it was quite significant to CN results, and we might be in that kind of scale,” Jean-Jacques Ruest, chief executive of Canadian National Railway Co., said in a BNN Bloomberg interview Tuesday about recent blockades in solidarity with the Wet’suwet’en First Nation that choked off Eastern Canadian rail traffic.
“The difference is we’re early in the year – we’re only two months in – we’ve got 10 more months to try to make it up to meet our year-end guidance.”
In late January, CN forecast earnings-per-share growth in the mid-single-digits this year, and said it expects free cash flow in a range of $3.0 to $3.3 billion.
The railway announced Tuesday that most of the 450 employees it temporarily laid off amid the blockades have been called back to work. However, Ruest said that CN and its customers should expect a ripple effect from the logjam the blockades caused.
“We’re still adding up the costs of all this,” he said. “Obviously it will have a big impact on lost revenue. It will have an impact on our costs.”
“This causes a significant disruption to [us], but also to our customers.”
Meanwhile, Ruest said that mounting fears over COVID-19 will also have an impact on imports coming into Canada’s west coast terminals.
“Those who rely on the supply chain from China and other countries in Asia have been having a challenge,” he said. “There’s a gap, and the gap right now in Vancouver and Prince Rupert is very evident. It’s a gap of imports.”
He said that if import traffic from China continues to thin, Canadian companies will have to start looking at other countries for supply.
“I think at this point the focus should really be on the demand side in Canada and the United States,” Ruest said. “The consumer will continue to consume and then the supply chain will have to find a way to get what we need from some other country than maybe China.”