OTTAWA – Canada’s railways saw profits and revenue decline last year but an industry spokesperson says better days are just around the next bend in the track.
Robert Ballantyne, president of the Railway Association of Canada, said in his annual report on the industry that changes being made now will soon make an appearance on the bottom line.
“Canada’s railways are in the process of reinventing themselves,” he wrote. “Despite the drop in total operating income for 1995, other measures indicate that the efforts are showing results that will flow through to net income in future years.”
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The reinvention is being done through management restructuring, labor productivity improvements, introduction of new technology and trimming the system, said Ballantyne.
The result will be more revenue generated for each employee working and more cargo being hauled in each operating rail car.
He said this result will be aided by government rail deregulation legislation approved and implemented this summer.
Last year, Canada’s 32 railway companies recorded net income of $387.4 million from rail operations, a 32 percent drop from year -earlier profits. The industry blames it on rate competition, higher fuel costs and taxes.
Revenue down
During the past six years, net revenue for each tonne of cargo hauled has fallen 8.9 percent, according to railway numbers.
The report provides the latest evidence of railway efforts to trim their systems. Between 1994 and 1995, the industry reduced its employee count by close to 3,500. Compared to a workforce of 75,000 in 1988, the railways now employ just over 50,000 people.
Railways also reduced their freight car fleet by 3,000 last year and trimmed almost 2,000 kilometres from the system. The industry began this year with just over 110,000 freight cars in service.
