’10 will be a strong year for railway, execs predict

TORONTO — CN Rail says its first quarter was buoyed by the auto industry’s ongoing recovery, an uptick in industrial production, and strong commodities demand.

Speaking to investors earlier this week, company officials said the pace of North American economic recovery led them to elevate their 2010 earnings outlook after posting a higher-than-expected 21 percent increase in its first-quarter profit.

Canada’s largest railroad now predicts double-digit growth in 2010 adjusted diluted share earnings.

"The economic recovery is faster than we anticipated. We have good growth across all of our businesses," said chief executive Claude Mongeau. "It’s not only about the economy, it’s about our ability to serve our customers."

Prior to the company’s annual meeting earlier this week, Mongeau told The Globe & Mail that he plans to diversify his company through partnerships in the trucking, shipping and freight-forwarding sectors, seeking alliances to help clear bottlenecks in North America’s sprawling transport system.

"I see our role as becoming true supply-chain experts," he told the national newspaper. He said he is devoting his energy to taking a broader view of the transportation system as the rail sector rebounds from last year’s recession.

"The trucking industry is our competition, but we can also be partners because we have a lot of business that starts in a truck and finds its way onto the railroad between cities, and finishes at a destination with a trucking firm," he said.

Greater co-ordination will help reduce traffic congestion, he said. "How we all come together from a supply-chain standpoint is the key to improving deliveries for our customers."