PERFORMANCE OF CLASS I RAILWAYS IN CANADA AND THE UNITED STATES

In recent years, Canadian railways have been struggling, trying to deal with the dual problem of excess capacity and high labor costs. In 1993, Canadian railways carried 90% of their freight on only 40% of their lines. They also spent 42% of their operating expenses on labor. During the 1970s the U.S. railways, particularly in the northeast, faced similar problems. Today the U.S. railroad system is the most productive in the world and one of the most productive industries in the United States. Although the size of the U.S. industry is much larger, it would be useful to study the American experience, look at the gap in the performance of the two systems and get an indication of the future of Canadian railways. Section 1 of this study presents a comparison of the relative size of the Canadian and U.S. railways for 1993. Section 2 comments on important changes in major variables, such as freight revenues, employment and track, between 1984 and 1993. Section 3 compares the performance of the Canadian and U.S. railways with the help of such standard measures as revenues and expenses per ton kilometer and operating ratios. Section 4 looks at labor productivity and excess track. Section 5 provides summary and conclusions.