Canadian National Railway Company ($CNR)

All right. Good morning. We're going to kick off here the second day at the Industrials Conference on the transportation track. So I'm Brian Ossenbeck. I cover transportation and logistics on the equity side. We have Canadian National here to kick us off. Pat Whitehead, who's the COO; Ghislain Houle, who's the CFO. So thanks, guys for making the time to be here with us today. And I'm going to turn it over to Pat to make some introductory comments and see if Ghislain wants to pitch in, and then we'll go straight into some of the Q&A. So over to you, Pat.

Okay. Brian, thank you, and good morning, everyone, and thank you for having us here today in Washington, and thank you for spending part of your St. Patrick's Day with us. Let me start by talking about the state of the railroad because the story there is a good one. Our network is running as well as we've seen it in over a decade. Conditions in Q1 vary every year. And while we didn't experience the same deep freeze this February as we did last year, we still had to operate multiple days in tier restrictions, both in January and again in February. We also faced meaningful snowfall on top of that, and you can see the cost of removing that snowfall that shows up in our financials. And through all of it, the network held up. Every time the weather tested us, we bounced back quickly and decisively. It's a reflection of our consistent execution and the operating discipline that this team continues to build. Our results speak for themselves. Our car velocity is up nearly 10% year-to-date in comparison to last year. Network train speed is up 6%. Our terminal dwell is down 6%. Strong labor and locomotive productivity is showing up. We achieved record fuel efficiency in February of 2026. These are not isolated data points. They are very clear proof that our operating model is working for us here at CN. Now I want to talk about how strong operations are translating directly into commercial momentum. Volumes based on RTMs are up 3% so far this year, slightly ahead of where we expected we were going to be at this point. The fluidity of our network is the major enabler of that performance. But I want everyone to take those results with a grain of salt. Q1 brings a lot of noise with the winter weather conditions. For example, in January, our volumes were down 3% based on some tough winter operating conditions. February, however, was much more favorable in 2026 versus 2025. Volumes were up 15%. And thus far in March, with the return of winter, volumes are down 4%, and I would like to say that winter is in the rearview mirror, but it certainly is not. Winter has come back to visit us just this week, and we are experiencing blizzard conditions across much of the U.S. network across the Midwest of the U.S. and in Ontario, specifically in Northern Ontario. Both locations have recorded up to 3, possibly 4 feet of snow across the network. Let's take a quick look, though, at Canadian grain. As we've said, it's a record crop, and we moved record volumes in September, October, November and December. Then in Q1, the grain demand remained strong as always, and we delivered our second best ever January and a record grain movement in February. We achieved this by improving car cycle times by 15% versus last year. This freed up real capacity and allowed us to move the volumes with a lower asset base more productively. Now the crop is the crop. And what we moved so far this year may have been advanced from Q2, time will tell. We see similar commercial successes in Q1 with overseas intermodal, domestic intermodal and potash. Strong service is driving incremental business. A critical part of that success is the tight alignment between operations and sales and marketing. Janet and I and importantly, our teams are absolutely joined at the hip. And that matters a great deal because in this kind of demand environment, when an opportunity shows up, whether it's a spot move or expanding to a new end market, we need to be able to move quickly. This agility is giving us a real advantage right now, and it's something we're going to continue to lean into. Finally, let me speak on what's ahead. We've built a railroad that gives us meaningful leverage for when volumes return without requiring a significant step-up in capital, and we're exactly where we want to be. We reduced our capital envelope this year not because we were constraining CapEx, but rather we completed the work we needed to do. The major work is behind us. The locomotive fleet is the healthiest that it has ever been, and we have units in storage. The network has capacity to grow into. The foundation is in place, and we're well positioned and ready to move for when volumes begin to grow across the industry again. And structurally, you've heard Tracy say this many times, our opportunity is compelling. As the railroad of the North, we sit at top an incredible natural resource base. We are bullish on agriculture and energy, and we have an unparalleled port network that provides access to every global market. This uniquely positions us to support customers in both our current markets and as trade flows continue to evolve. Ghis, anything to add?

Yes. Maybe just a couple of points, Brian, just to give a little bit more visibility on the first quarter. First of all, Pat you did a good job covering the volumes and the RTMs and putting this in perspective in terms of operating -- winter operating conditions. As you know, Brian, the FX is hovering still around $0.73 to $0.74, and that's versus $0.70 last year in Q1. So that will create a headwind in the first quarter of about $0.05. And I want to reiterate the rule of thumb is every cent of appreciation of the Canadian dollar to the U.S. dollar is unfavorable to EPS by about $0.05 on an annualized basis. So that's on FX. On fuel prices, as you know, our fuel surcharge is pretty much locked in with a 2-month lag. However, fuel prices with the war in Iran have jacked up. And we believe that, that will create a headwind, call it, $0.03 to $0.04 in the first quarter. And then finally, as you know, and we've talked about this, and I won't dive into it too much, Janet did a good job on the earnings call to talk about the impact of mix. And that obviously continues and will have an impact in the first quarter. If you remember, last year, forest products and metals did not have the size of the tariffs in the first quarter as we do today with 45% tariff on forest products. I want to remind everyone that CN is the railroad that moves the most lumber in North America. So that obviously has an impact. And metals at 50% has an impact as well, although we were trying and we've been able now to move some intra-Canada moves on metals that has elongated the length of haul, but have put some type of pressure on car supply. Aluminum with 50% tariffs still finds its way in the U.S. So I'll leave at that and maybe turn it over to your questions.

Thanks, guys. Ghislain, I'll stick with you just for a second to finish on the short-term stuff. So fuel is, I guess, first, is that going to be something that just catches up and reverses later? I know the price has gone up really fast. So is there like an actual net loss -- or just more timing?

Yes. I mean, fuel is very, very volatile, Brian, as you know, and you follow this as closely as I do. So if fuel prices, OHD and WTI stays where it is, for the rest of the year, you're right, it should reverse -- it would reverse itself back in the second half of the year to become a small tailwind. So this is more of a timing issue. But again, I mean, it changes almost every week. So we'll see what happens.

And just on the operating conditions, Yes, I thought we were out of winter already, put my snowblower away, and that's probably why we got hit again. But in terms of the impact for the network is usually see a deterioration of about, I don't know, 400 basis points quarter-to-quarter OR roughly. Is this a little bit worse than that from just how you're feeling it in the field? I know it was not quite done with the quarter, we're still feeling it right now, but it seems like it's a little bit worse than normal from just like a cost and operating perspective here in the first quarter.

Do you want to take that one?

So yes, let me talk about -- so I would say this, as you look at our performance, and I wish we could declare ourselves out of winter as well. And I think saying out loud that we might be out of winter may have to your point, brought it back. That and bringing out your snowblower surefire ways to bring it back. Our performance is strong. The velocity is trending the way we would like to see. Our trains are longer and heavier, locomotive reliability is as high as it ever has been. What we have seen is while it has been a bit warmer, particularly in February, we saw less Tier 2 days. Those are the days that are minus 30 or colder, where we have significantly shorter trains. We saw 6 days in February versus 19. What has been different in 2026 and has impacted cost is the amount of snow we've had to remove. And you can see that in folks that live in these portions of Eastern Canada and throughout the Midwest of the U.S. that has driven a significant cost in removing snow. Outside of that, I would say that our cost control measures that are in place in the transportation group, I talked a bit on the Q4 earnings call about our fast-tracking initiative where we're going through terminals. And that work continues, and I'm very pleased with that work we're doing, and we continue to have that discipline around operating expenses in both mechanical and engineering with the caveat that in engineering, the cost of snow removal is significant.

And I would say, Brian, that the word at CN is, listen, we all know that we are in highly uncertain times. I think that the uncertainty today is even worse than when we were sitting doing the earnings call at the end of January. So we don't control the economy. We don't control what happens with Iran, but we're pushing on everything that we do control. And as you saw last year, we got ourselves very fit, and we will continue to turn every rocks we can to make sure that, again, we control costs. And we -- and you've got Janet, by the way, on the marketing team having boots in the ground knocking on doors to try to get every carload possible. So this team is energized. I hope that people could have sensed Janet's energy on the call in January, and she's energized the team. And I think that she's working, Pat, extremely closely with you. And we've got good service. So that's the bottom line. So it allows us to get an additional carload. It allows us to get pricing in a tough environment. So that's the word at CN is we're pushing on everything. And that's what we've heard from shareholders. We understand that there's a lot of things out there you don't control. We want to see proof points that you're doing everything you can on everything you do control.

So one of the things you control, Pat, you just mentioned a second ago, just the focus on terminals and engineering efficiency. So I'd love to hear a little bit more about how that's going here as we start off 2026. Obviously, a little bit of weather in the way, but what do these initiatives look like maybe over the next couple of quarters, maybe the next year even?

Okay. Yes. So we started this work late in Q4. And to date, we have completed our work in 6 of our major terminals. We will go through 25-ish of the largest terminals. And really, if you think about it through this lens, we go into these terminals, we take a clean sheet of paper and we say to the operators that run that terminal and know it, they know it the best, how would you rebuild this operation if you had the opportunity to build it from the ground up, matching the resources to the volume, and let's work it backwards from there, a zero base, what do you need to operate this terminal? And I would think about it through this lens, that becomes an exercise in what's the baseline of resources, people, locomotives, whatever that may be, minus 1. And let's sweat the assets, let's sweat and let's work really hard to move that -- those GTMs with a lower asset base. That's the basis of the work we are doing. It is going very well. As we are 6 terminals in, we are going to be very aggressive with this initiative and finish midyear. So let's say we finish going through the terminals and doing that work by July. And it will not be a one and done. It will be -- you build this plan from the ground up and then it's the discipline around ensuring that we don't have creep set in when you've gone and rightsized the terminal with volume being the guiding light, how do you continue to have that discipline around having the resources match the volume. We'll move through that quickly, and then we will continue to come back and check that what we have put in place is working. On the engineering and mechanical side, I would say that while it's been a tough Q1, particularly as I stated on the engineering, that discipline that was built, Jamie Lockwood was our VP of Engineering for about 2 years, and he helped us really work on that capital efficiency work in the engineering group, the operating expense, the cost control, and that work continues. I'm pleased with -- very pleased with where we are as an operations team.

And how are you feeling about staffing levels and just hiring in the pipeline? It's been a challenge for the industry off and on over the years, but it seems like maybe you're a little bit past the crux of that. But how do you think of that now and as you prepare for hopefully some better growth in the future?

Yes. We're poised for growth. I would say this, we continue to have about 800 train and engine employees in a furloughed state. And what we are seeing is an unusually high return rate when we do have to flex up, and we have had to do some of this as volume has come back. When we go to return furloughs, they are returning at a very high rate, higher than what we would have expected. So I am not concerned with our ability to hire this too and staff up as volume returns.

And Pat, I would say higher, like in the 90%.

It's better than 90%, correct, which typically in the past, we had seen somewhere between 70% and 90%.

Exactly.

And for a while, there is the work rules, the work best rules that we're stacking. I mean it feels like we're past most of those things. There's nothing new coming. The network has kind of absorbed how to work through those. Is that correct?

Knock on wood, no regulatory changes in the work-rest world. We -- the U.S. experienced that change in about 2008, Canada in 2023. And I would say you're spot on. It took us -- as we expected, it took us some time to understand what the new world looked like from a duty and rest period, how do we work in that new world. And I would say that we have worked through that and the labor productivity is up significantly. A train and engine employee basis, we're moving 12% more GTMs on the train and engine headcount basis. So we have definitely figured out how to maneuver around in that the new duty and rest period world.

So as Peter mentioned, there's been some changes to commercial and ops teams. They've always worked closely together, but I guess what's changed since we've seen that in the last couple of quarters when it's been more official with Janet in the role? And is it is it materially different? Like how should we think of it from the outside? Because we would think that these teams are working together all along, but like has there really been a change or is it just new people and new seats?

I would say there's a lot of discipline built around how sales and marketing and operations. We have very formal process, as we call it P3X, people power plant. So how many people, how many locomotives, what does the physical plant look like? So there's always been the discipline around how do you sync up sales and marketing and operations to staff to meet the volume. What I would say is when you look at someone like Janet and her career at CN and the respect that she commands within internal and external, I see an energy around her team. People are committed to Janet's vision. There is the boots on the ground, the energy around going and chasing every carload and the way she's directing that team and back to your point, not just the formal process of how do we link up the forecast to staffing, but the energy and the synergy that I see between the teams, I'm really pleased with what I see. I think Janet was a fantastic pick and she's doing a great job.

And both of you, your teams are well connected with finance. And what we're trying to do is push down the decision-making and cut as much as possible the red tape because we need to be very versatile. And I think that we're succeeding to do that, like Janet was VP Finance with me for years. So we all know each other very well. And it's not a long 2-page e-mail that forces us to make a decision. It's a phone call. It's -- so we're disciplined, but we're fast. And I think we work very, very well together. And then you've built your team, Pat, with some new heads in some of the places and some of the geography. Maybe you want to talk a little bit about that, and I think they're outstanding people.

Yes. I would say that as we've changed our structure, one of the things that we've done is now that we're in a single COO structure similar to the rest of the industry, we did appoint a Senior Vice President of Operations, a long-tenured CN legacy railroader, James Thompson. He's got 25-plus years here at CN. And we've built our team around both legacy CN folks who have been here throughout the entire scheduled railroading journey, also folks from other railroads that we've brought in. So it's a nice mix of both CN legacy folks and folks from industry. But I would say this, that this entire team in operations and across the company, what we are all committed to is that we run a disciplined scheduled railroad. That is our North Star, and that is how we build the plan, run the plan and sell the plan is that commitment to we run the model that works best for our property.

So one of the things we've talked about a little bit in the past is just the southern and the eastern networks. And you mentioned CapEx and you're not pulling back on growth necessarily, but there's always been a challenge, I guess, in my mind of how you increase the density there. There's only a certain amount of freight that wants to go there. You spend capital, but you want to return on it. So how are you thinking about those 2 areas of the network? And are there any initiatives or end markets that could potentially help balance those out?

Well, I'll start, and I'll ask Ghis to chime in as well. And I would say that, look, as we look at our South and our East properties, you think about it through this lens, the East, tremendous amount of capacity for several reasons. In the past, there was so much industry in Eastern Canada, you think about the automotive industry and the interaction of passengers. So a lot of the capacity that was built in Eastern Canada was not all funded by CN. So to accommodate expanding, you think about it similar to the Northeast corridor in the U.S. I would call the Kingston sub or Toronto to Montreal is kind of Canada's Northeast corridor. So a lot of that capacity we have was also funded by passenger rail. So we have this capacity to grow into. Yes, it's needed for our operation and to accommodate the robust passenger operation, but there's room to grow. There's also room to grow to continue to grow in our southern network. And I would say we -- this is part of that boots on the ground, talk about Janet's initiatives, folks out there trying to find those carloads to fill up that network. And I would say that while I don't have specific initiatives that I would point to, we are -- even as you look across our network, trains in the East and the South, as we rework the train plan, we are creating heavier, longer trains for what's out there with still room to grow into that train package. I would say in the carload, the merchandise world, there's plenty of room to grow into that train package. Bulk commodities usually come with additional train starts. We do have a new scrap train move that's specific to the southern region that is moving from Flint, Michigan and going offline, unit train load of scrap steel. And so there's opportunities out there, Ghis?

Yes. It's really the boots on the ground, knocking on the door and convincing customers and noncustomers to build a facility on your rail line. And then if you succeed, then you've got them committed for the next 30 years. One specific example of this that we've talked before is the oil distribution facility in Mac Yard. I'm happy to report that I think the second phase that is finalized and now it's coming online. So these are -- in a lot of cases, these are not home runs, but they're singles, they're doubles and they add up. And I think we -- with the energy that Janet is bringing, to your point, we need to knock on doors and bring more facilities on our line in Eastern Canada and in the Southern region. We have the capacity. We've had the capacity for a while. To your point, some of it paid by us, but some of it paid by others. And this is what Janet has in -- and she's reporting on this every week to us, to Tracy. And I think that this bodes well for us.

So one of the things, obviously, you've had to deal with is tariffs changing end markets and rules and everything basically overnight, maybe sometimes a couple of times. But can you just walk us through how you make those operational changes? And do you think there's any more coming? I know it's been a pretty significant headwind from a financial perspective.

I'll start and say that when you look at the impact to tariffs for our business, I would say the most impacted is forest products. So -- and if you think about not just through the lens of tariffs, but also we would love to see housing starts return to levels of several years ago, which will also get -- we would expect to get forest products moving. The impact of tariffs to our business in 2025, Ghis, correct me if I'm wrong, was around $350 million. So it's been significant. But my job, my role is how do I absorb as much of that tariff cost through efficiency as I possibly can. And so this is one of the many charges that operations has is how do we become more efficient as we face those uncertain tariff headwinds. And so we'll continue to look for every opportunity to get more efficient. Ghis, anything?

No, I think you covered it well.

Ghislain, just to come back to the cost for the first quarter for a second, how much -- you mentioned snow removal. How much does that usually run, I don't know, per quarter, per first quarter? And can you give us some context in terms of how much more expensive that was this year?

Yes. You're going to see this in the purchase services and material when we issue our results. I would say you're talking in the $10 million to $20 million headwind on a year-over-year basis. So yes, that's the snow.

Got it. So we're going to have obviously a lot of focus on Transcontinental mergers here for a little while, it seems. So I just want to get your perspective as an operator, like what are some of -- if you look at that sort of transaction in the U.S. primarily, like what are some of the integration challenges, opportunities that you think from your perspective, being an operator? And are any of those things you worry about affecting CN's core business as well, if there were some issues or if there are certain areas that you're more particularly concerned about than others?

I would say let me start with one thing I claim as a railroader is I'm a Conrail survivor. So I was a frontline supervisor middle manager with Conrail in 1999 when Norfolk Southern and CSX acquired. There are portions of Conrail, and I lived that integration. So I'll set that aside for a moment and talk about some of the challenges of integration separately. I would say, as I think about our network, I would go as far as to say we are probably the least impacted by the proposed merger. I would also say that it's important to note that 85% of our traffic originates on our lines and about 60% of our traffic terminates on CN line. So we feel very good about our franchise, not to be confused with what we've said before is, look, we're going to protect our franchise for our customers, for our stakeholders, and we're going to protect what we feel is essential in this industry and protect competition. Now specific to integration, I would say -- and I was asked this last year at SWARS, I think that I'll make no assumptions about approval of the merger, but I would say what I said at SWARS, approval is ground zero. The due diligence that goes into and the complexity of taking 2 large rail networks and integrating all of the IT systems and that specifically was the biggest challenge is one of the reasons I call myself a Conrail survivor, the IT systems did not integrate well and that's probably a bit of an understatement for those that are familiar with that transaction. So I think assuming that if there were regulatory approval, that's ground zero. The work that is done to integrate the IT systems, the HR systems, the cultures of 2 large organizations and frankly, building an operating plan that can be executed, there's a lot of work to be done assuming that there were to be approval. So I'm less concerned about service issues that would affect our network, as I talked about our origin -- strong origin and destination franchise. Clearly, though, if there is a disruption in the U.S. rails as there have been in the past with these mergers, we're all affected. And so what we always say in the industry is we are best when the industry is running well, not -- there are a couple of railroads that are running very well, and there are others that are suffering. If you look back a few years ago, some of the service issues that popped up, we really need the entire industry to be strong.

And I would say that's the key risk. The key risk is if the integration is difficult, and as you know, Brian, when you look at all companies that have acquired other companies, it's typically not on the deal that they've screwed up when it's on the integration when things have not gone well. And that could invite reregulation. And if there is more reregulation because of the integration difficulties of these 2 railroads, then the regulator won't reregulate just one railroad. They'll reregulate the entire industry, and that's the risk that we see on that transaction.

Well, maybe one of the other opportunities in the non-M&A world is to do more partnerships. And we've seen a few of those in the past. I think, Pat, you're probably uniquely positioned to comment on the Mid-America one, which I think was between CN and Norfolk, right? So why haven't we seen more of these in the past? What are some of the challenges to get those to work and also maybe some of the opportunities that don't require such a large transaction?

Yes. We see these partnership opportunities as a tremendous potential that doesn't require all of the regulatory approval and all of the integration challenges and risks that come along with it. And if you think about some of the services that we offer, our partnership with Union Pacific, Ferromex, we now -- that is a product that offers service from Mexico into Toronto, for example, with 5 days, our Falcon service. And it really comes down to how do we continue to convert that truck traffic from the road to the railroads. And I think that if you look at the share of freight that the railroads have in the U.S., roughly all U.S. railroads have about 18% to 20-some percent market share of freight that's moving. The rest of it is in mostly trucking or other modes. So our opportunity is to make truck-to-rail conversions. We are offering a service that is very much truck-like. I look at it and I think about the cost of that service and its competitive nature to truck, that's a tremendous opportunity if I'm the shipper. And so I think we continue to lean into these partnerships. We find additional partners and services that make sense. We recently -- we have the Nashville opportunity with CSX. Really, it's about how do we get out there and tell the story and grow that business. I think about some of the services over my career that started with, I would see these trains coming and they were 1 or 2, 5 packs of containers when I started 33 years ago, these are now services that are running coast-to-coast that are 10,000-foot trains and sometimes there's 2 or 3 pairs of these trains. So there are cases out there where interline partnerships have grown the business. We just -- we need to continue to lean into these and convert the trucks.

And I would say that if you agree that the partnerships in the past have typically not worked because they have not been operationalized. So it was 2 CEOs going playing a game of golf and then put a nice press release. And then on the day-to-day, the operating people would kind of kill each other. So the first time we've operationalized this was with UP and Ferromex and exchange information. So to make sure that you're like a single-line railroad operating. And to your point, now we have service from Mexico to Toronto in 5 days, that service before because we did have -- we were exchanging with KCS before and Jacksonville, if you remember, that was anywhere between 15 and 30 days. So you might as well say, I don't have a service. And really, the railroads have lost their market share through the trucks through the years, not short-haul trucking, like we know that trucks are very powerful in a radius of 500 to 700 miles, but it's more 1,200 miles. Like Mexico to Toronto is 2,000 miles. That can, should be on a train. That can, should be on a train. So we need to operationalize exchange information. Now frankly, it's a bit more challenging to manage because, again, you don't own the other railroad. But if you are allowed to exchange information when there's issues, not to point fingers and to work constructively to improve the service and long-haul trucking has been the most overpromised, underdelivered in the last 20, 30 years.

And I would say to that point, it is -- the tone is set at the top and operationally, that partnership and that cooperation is there. The interchange comes in from either railroad and there is a disciplined schedule around, all right, this is part of the Falcon service, that interchange is going to be made, and we're going to continue on as though we're one carrier. And that is how we continue to build these is the discipline around completing the interchange because sometimes there's noise in railroad interchanges. When you operate it as a single service, the improvement and the potential is there.

So we have time probably for one more question. It feels like oil price, energy volatility is going to stick around for perhaps a little while. What are some of the end markets or even services that you're watching or maybe have been impacted already from the volatility we've seen? I imagine it's going to impact a lot of things, but crude by rail, potentially some of the fertilizers, anything that you're really focused on or have already perhaps seen some impact in terms of volume based on what energy prices have done?

I think the biggest risk on energy prices is that it puts some countries into a recession. I think that's the biggest risk I see. And then housing starts, therefore, stays where it is weak. When you look at automobile, it's relatively weak, like 14 million light vehicle sales in the U.S. used to be 17.5 -- so I think it's all the uncertainty that it creates. And you know that uncertainty is not good for the economy. People will wait. People will say, hey, I don't know whether I'll keep my job tomorrow because I don't know what will happen to the company. So I'll wait to buy a new dishwasher. I'll wait to change my car. So I think that's the -- key is this overall uncertainty hopefully will not bring Canada, U.S. and other countries into a recession. I would say that that's the key. Maybe just one minute left. Do you want to conclude -- anything you want to conclude, Pat?

Well, I would just chime in on that and say one of the lenses I think about that through as it relates to oil prices and what can we do a couple of things. First, we are and have been for a very long time, the most fuel-efficient railroad in the industry. And when you think about our results, we continue to set records versus our own fuel efficiency. So we are the best in the industry, and we are finding ways and pulling the right levers to make ourselves even more fuel efficiency. So again, my job, my team's job is to not allow rising oil prices to offset that with the productivity we see around how we manage our fuel efficiency program, and that's going very well. And as it relates to, as I think about your question, opportunities that could be unlocked, I would just say, again, we have just been through an investment cycle where we have built this network to bring on volume. The Western gateway, our Edson Sub just outside of Edmonton, everything that wants to get to Prince Rupert and Vancouver prior to 2025 was about 40% double tracked. It was definitely the limiting factor of our -- getting to our Western gateways. Last year, we strung together a series of double track projects that made some very nice long stretches of double track. We now have 65% of that is double track, which created 7 trains per day of capacity. And the way we think about capacity is how much capacity did I create without negatively impacting our health networks, health of network metrics, excuse me. So in other words, 7 new trains of capacity can be absorbed into that portion of the network without an impact to our car velocity and our network train speed. So as I think about it, if there are opportunities out there that present themselves based on whatever these factors may be, our locomotive fleet is the best that it is most reliable it has ever been. We have plenty of people out there. We have 800-plus more people that we can call back as volumes show up, and we've built the network to take it on. So we're open for business, not just in the U.S. and in Eastern Canada, we have really worked hard at this Western Canadian network to be able to allow that growth to come on.

Okay. Well, that's a good place to end. We are out of time anyway. So thanks very much, guys, for joining us.

Thank you. Appreciate it.