* CN targets operating ratio in "low 60s" over next 3 years
* Will use longer trains, fuel efficiency to boost
* Sees mid-single digit percentage growth in carloads in
By Susan Taylor
TORONTO, Dec 11 Canadian National Railway Co
, the country's largest rail operator, said on Wednesday
that it aims to improve its industry-leading operating
efficiency over the next three years, even as it carries more
The Montreal-based railway estimates its 2013 operating
ratio at about 63 percent, nearing last year's 62.9 percent, and
targets a rate in the "low 60s" over the next three years.
Operating ratio measures productivity by tallying how much
revenue is used to maintain operations. The lower the number,
"For me, low 60s is 60.001," Chief Financial Officer Luc
Jobin said at the company's investor update in Toronto.
"Anybody that can move on a big ship like this, that can
move the operating ratio from 63 down to 60.001, is actually
doing quite a bit of travel, and that's a lot more difficult to
do ... while growing the franchise at a very good clip."
Improvements are also more challenging because CN operations
are already relatively efficient, he said.
The railway will work to boost productivity by a range of
measures, such as running longer trains and using more
Booming demand in CN's energy business, which includes
crude-by-rail and sand used for hydraulic fracturing, along with
a record Canadian grain crop will help power revenue growth in
2014, Chief Marketing Officer Jean-Jacques Ruest said.
CN, which aims for mid-single digit percentage growth in
carloads in 2014, said it also sees volume growth from its
intermodal container shipping business, along with the
rebounding auto and U.S. housing markets.
CN's smaller Canadian rival, Canadian Pacific Railway Ltd
, has said it will reach its mid-60 percent operating
ratio target in 2015, some 12 to 18 months ahead of plan.
CN said after markets closed on Tuesday that it expects
double-digit percentage growth in earnings per share in 2014 and
plans to boost capital spending by about 5 percent to C$2.1
billion ($1.98 billion).
Shares of CN, up more than 30 percent this year, declined
3.2 percent to close at C$57.65 on the Toronto Stock Exchange on
Wednesday, falling in tandem with stocks of North America's