11:17 AM EDT, 08/07/2024 (MT Newswires) -- CN Rail flagged capacity constraints in its 2024-2025 Canadian Grain Plan, notes RBC.

The company last week released its 2024-2025 Grain Plan, highlighting capacity risk throughout its report. CN pointed to 1) federal labour regulations that it believes results in +15% more people to move the same amount of freight; 2) extended interswitching; and 3) continued rain delays in loading grain vessels at the Port of Vancouver as all negatively impacting capacity in the grain supply chain.

CN believes these issues will cause demand to exceed capacity in the Edmonton-Jasper-Vancouver corridor during the fall of 2024 and into early 2025 which (in addition to the impact from wildfires in Jasper) RBC sees as a headwind to margin and the company's sub-60% H2 O/R target.

The company also provided a Grain carload movement forecast of between down -2% to up +7%. RBC is modelling for Grain volume growth of +5% this crop year and believes CN's range builds in a degree of conservatism.

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