(The Canadian Press distributed the following article on September 5.)
MONTREAL — Canadian National Railway Co. is imposing a four per cent increase in rates that cover about 40 per cent of its freight movements not subject to long-term contracts.
The increase in so-called open tariff rates, effective Oct. 1, comes on top of hikes of as much as 10 per cent which started in January. Most of CN’s freight is carried under confidential contracts with individual customers, and a spokesman said the open tariffs apply to less than 10 per cent of the railway’s business.
He added that the rate move “is basically a signal to the marketplace.”
The freight rate rises are “primarily to combat the negative effects . . . of the continued strength of the Canadian dollar relative to the U.S. dollar, as well as higher costs,” Canada’s biggest rail company (TSX:CNR) said in a brief statement Thursday evening.
CN reported in July that its second-quarter earnings were $244 million, down from $280 million in the year-ago quarter; the decline was attributed to the stronger Canadian currency, reduced grain movements and higher fuel costs.