Are you looking for a stock?
Try one of these
Canadian National Railway's safety record deteriorated sharply in 2014, reversing years of improvements, as accidents in Canada blamed on poor track conditions hit their highest level in more than five years, a Reuters analysis has found.
Canada's Transportation Safety Board (TSB) said on Tuesday that track failure may have played a role in CN's three recent Ontario accidents, which have fueled calls for tougher regulation. The agency said oil unit trains, made up entirely of tank cars, could make tracks more susceptible to failure.
Data obtained under access to information laws and analyzed by Reuters shows a broader trend, which has not been previously reported, and could pile more pressure on CN Rail to slow down trains or reduce their length. A crackdown on oil trains could raise the cost of shipping Canadian crude by rail.
Trains operated by CN in Canada derailed along main lines 57 times in 2014, up 73 percent from 33 in 2013 and well above a 2009-2013 average of 39 accidents per year. On CN's full 21,000 mile (33,800 km) network, which also includes the Midwestern and southern United States, freight carloads rose 8 percent last year.
At least 27 of the domestic derailments were caused by track problems, up from a previous annual average of 14. Data for smaller rival Canadian Pacific Railway showed no similar pattern.
"CN is keenly aware of its recent safety trends, starting with a sudden increase of its accident rate in 2014," Canada's biggest railway said in a response to Reuters' analysis.
The railway pointed out that its performance improved between 2007 and 2013, and so far, 2015 has been better than 2014. It said it was reviewing recent trends and has started testing tracks more frequently, boosted spending on infrastructure and installed new technology to detect problems with its tracks and equipment.
For 2015 it is planning to increase capital spending by $300 million, to $2.6 billion ($2.1 billion US).
The rapid rise of crude by rail traffic has made more derailments potentially deadly, exposing railways to more scrutiny, particularly since 2013, when a runaway oil train leveled the center of the Quebec town of Lac-Megantic, killing 47 people.
Doug Finnson, president of a Teamsters union representing CN Rail's train crews, said he was particularly concerned with the recent Ontario derailments.
"We're on the record saying the trains are too long, the cars are too heavy, and the trains go too fast."
Yet it is not clear what was behind CN's poor safety performance last year.
New Brunswick farmer Paul-Emile Soucy, who experienced CN's troubles first-hand, faults inadequate maintenance.
On Jan. 26, 2014, a CN train derailed crossing his 230-year-old family farm. He said CN workers had marked railroad ties that needed to be replaced months before the accident, but they were replaced only after the derailment.
"They knew that the ties were bad and rotten and had to be replaced, but they didn't do anything about it," said Soucy. Data obtained by Reuters indicates that a broken rail caused the derailment.
But CN rejected Soucy's criticism, saying it spent C$41 million on basic maintenance in the area between 2012 and 2014.
The railway blamed bad weather and increased freight volume for last year's spike in derailments. Rough weather, however, did not prevent rival Canadian Pacific from improving its safety performance, and the rise in volume was far less pronounced than the jump in derailments.
Both railways shipped similar volumes of crude last year - CN moved 128,000 carloads, or some 2 percent of its freight volume, and CP moved 110,000 carloads, 4 percent of its total.
The safety watchdog TSB has suggested that oil trains may have contributed to track problems that caused the Ontario accidents, but declined to comment on whether those trains could also be behind the overall rise in derailments, or comment on Reuters' analysis in general.
Transport Canada, the industry's main regulator, also did not comment specifically on Reuters' findings, but spokesman Zach Segal noted that Transport Minister Lisa Raitt has asked a parliamentary committee to invite CN Rail to discuss its operations.
CN suggested last year could have been an outlier.
"It's important to view CN's safety performance over a span of time to assess meaningful trend lines, not just on the basis of a single or two-year perspective," the railway said.
Its own statistics, shared with Reuters, show that its Canadian accident rate declined 26 percent from 2007 to 2013, to 1.71 accidents per million train miles. In 2014, the rate jumped to 2.67, its highest in at least a decade, but it is down to 2.15 so far this year. A less commonly used measure, accidents per billion gross ton miles, has improved markedly over the last decade, but jumped 58 percent in 2014.
Reuters' analysis showed last year's spike in accidents was driven mainly by track problems.
Ian Naish, a former director of rail and pipeline investigations at the TSB, said weather and traffic could have played a role, but one should also consider the impact of unit trains, which carry single commodities, on tracks.
"The intensity of loading is heavier than a mixed-freight train, generally," said Naish. "All the cars are the same design, and the loads are all the same, so it's the same impact, the same way, all the time."
Unit trains have long been used to carry coal, grain and other commodities, but oil trains are a product of the rise of crude by rail and the shale boom of the past few years.
CN declined to comment on its recent accidents in Ontario, citing ongoing investigations. It said, however, that it had seen no indication that unit trains cause accidents, noting that such trains carrying other commodities, many with heavier loads, have run safely for decades. But the railway said it was reviewing the issue with outside experts.