The state of the rail freight industry
Rail freight revenue per ton-miles stood at some 312.2 billion in 2019, but 2020 had less optimistic results. Iron ores and coal were the leading goods for Canadian railway carloading, representing 56.36 million and 33.5 million metric tons respectively in 2020. Metal, coal and automotive demand dropped that year, impacting the global freight industry.Two companies dominated the Canadian freight rail segment – Canadian National Railway and Canadian Pacific Railway. In 2020, these companies reported 230 and 152 billion revenue ton-miles respectively, a drop of about five and 1.6 percent year-on-year. As with the overall industry, the companies’ revenue ton-miles have dropped in 2020. The total revenue in 2020 for these publicly-traded companies were 13.8 and 7.7 billion Canadian dollars respectively. Canadian Pacific Railway trailed behind its competitor that year, ranking sixth in the leading North American railroad companies based on operating revenue, as opposed to Canadian National Railway’s fourth position. In March 2021, Canadian Pacific announced a shares and cash merger with Kansas City Southern Railway.
Passenger rail deeply impacted by the pandemic
Passenger rail in Canada is much smaller than freight rail. In 2019, commuter and tourist rail operated on 5,126 kilometers of track, while intercity trains operated on around 12,000 kilometers of track. The primary operator in Canada’s intercity passenger rail segment is Via Rail, who is an independent state-owned corporation with a mandate to provide intercity services. In 2020, the company reported total revenue from passenger services of around 92 million Canadian dollars – much lower than the freight rail companies. This was also a year-on-year drop of over 77.6 percent as demand shrank from long-haul passengers, regular commuters and tourists due to the national lockdowns ordered as a response to the Covid-19 pandemic. Via Rail’s ridership on its Toronto-Niagara route was particularly affected, dipping to just over 4,000 passengers that year.Revenue from commuter and light rail in urban areas at this time was much higher, at a combined 1.9 billion Canadian dollars for all operators, but still experienced a sizeable drop of over half its 2019 revenue, which stood at over 4.1 billion.