Canadian National Railway Co. said business has gone downhill since mid-March as the COVID-19 pandemic ripped into a sector that serves as a barometer of economic cycles.
CEO JJ Ruest, speaking at a conference held online, said revenue ton miles – a key industry metric – fell 15% year over year in April and 21% in May.
Ruest said automotive shipments have been a “roller-coaster,” falling, rising and falling again as factories in China closed and then reopened just as plants shut down in North America. He says auto volumes have dropped more than 90% year over year, with a bleak outlook for the months ahead as frugal consumers pull back on big purchases in a recession.
Ruest said earnings from crude by rail and frac sand are “as bad as can be” amid a global glut of oil and a pandemic-induced plunge in demand, both of which have sent oil prices to near-record lows over the past two months.
On the plus side, the CEO said grain revenues will likely hit new monthly highs in May, June and July after notching record levels in March and April following a backlog owing to a late, wet crop last year.
CN Rail has cut its workforce by 5,800 employees or 21% since May 2019, including 3,500 workers who are on furlough.