Problems at some of the world’s oceanic shipping chokepoints for energy supplies, especially the Suez Canal, may translate into higher traffic for North American railroads in 2024, according to Canadian National Railway.

During the company’s fourth quarter earnings call on Jan. 23, Canadian National Railway executives said they are hearing from potential customers who are experiencing difficulties getting materials through the world’s primary canal passages and the Red Sea. Railroads can offer partial solutions.

“We are seeing, obviously, some capacity come out of the vessel market with (shippers) having to go around Africa now,” said Doug MacDonald, CNI executive vice president and chief marketing officer.

MacDonald was answering a question about several companies currently avoiding the Suez Canal because of attacks happening in the area.

“We're starting to hear, with problems at both the Panama and the Suez Canal, that the West Coast is looking like a more viable option moving forward,” he said.

The country of Panama has cut canal transit traffic by 36%, the Associated Press reported. A drought in the area has decreased the water available for the transit.

CN Railway expects the troubles at the two transit points will eventually bring more traffic to its continent-crossing lines, but said that extra loads haven’t appeared yet.

“We haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward,” MacDonald said.

For 2023, the company reported earnings per share dropped 2% overall from 2022. Revenues for the year came in at CA$16.83 billion (US$12.48 billion), a decrease of CA$243 million (US$176.13 million).

CN Railway executives said the decrease came primarily because of a decline in cargo, including crude oil. The company’s revenues from shipping petroleum and chemicals dropped by 1% from 2022 to 2023.

However, the company did see an uptick in petroleum shipments in the last quarter, with an 8% gain in revenue, from CA$794 million (US$575 million) to CA$861 million (US$624 million). The company reported a surge in propane shipments to end the year.

“Petroleum and chemical volumes were up 12% in the quarter, with the exception of crude oil, all segments were up on a year-over-year basis,” said MacDonald. “We are handling record propane exports.”

Canadian National is the only rail carrier that serves three major petrochemical centers in North America: Alberta, Southwestern Ontario and the U.S. Gulf Coast.

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