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MONTREAL – Canada’s two major railways are well-positioned to weather potential economic headwinds and the U.S.-China trade war, analysts say, as ongoing investments in new cars and track bolster crude-by-rail and commodities shipments. Canadian National Railway Co. and Canadian Pacific Railway Ltd. shipped 23 per cent more oil and petroleum in 2018 to drive a four per cent increase in total freight traffic, according to the Association of American Railways. Crude-by-rail exports have spiked over the past year amidst a pipeline shortage and a big discount on Western Canadian Select oil, hitting a record 327,229 barrels per day in October, a 58 per cent year-over-year increase, according to the National Energy Board. With Enbridge’s Line 3 not set to come online until late this year and the Trans Mountain expansion facing uncertainty, CN and CP can expect continued high demand for shipments of the black stuff, DBRS analyst Amaury Baudouin said. The railways have drawn on lessons from unfilled contracts following the crude-by-rail boom five years ago, entering into multi-year contracts with oil shippers that set minimum volumes and higher fees to help insulate them from volatile demand, he said. “I think lessons of the past have been learned, […]
