All right, fantastic. We're gonna get going with our next session with Canadian National. To my left, we have Derek Taylor, Chief Field Operating Officer, and Ghislain Houle, CFO. I'm gonna pass it to Ghislain for some opening comments, and then we will get right into questions. So thank you, guys, for being here. Appreciate it.
Thanks, Scott, for having us. Beautiful day in sunny New York right downtown. I was here last week, I'm here this week, I'm gonna be here next week. Maybe I'll rent an apartment eventually here. So thanks for having us. Thanks for people in the room. I think there's a good turnout, and thanks for people listening on webcast, taking interest in our great company. Let me make a few comments on the business, and then I'll turn it over to Derek to make a few comments on the operations, and then we can turn to your questions, Scott. So, you know, as we said last week, I'm gonna you know, say a little bit the same this week, we're quite pleased with our performance. I think that we're performing per plan.
I mean, if you look at Q1, I would say we even did a little bit better than planned. When you look at Q2, our volumes are holding up. I mean, when I talk about volumes, I talk about RTMs, 'cause I think it's a better proxy than carloads. So our volumes are up 9%, quarter-to-date. When I look at the various categories, I'm quite pleased to see Intermodal International being quite solid at 23% up on a quarter-to-date basis. As you remember, last year, we were hitting the depths of the freight recession in the Q2, and that was a sector that was quite soft and quite weak. So that's coming back.
I would tell you, probably a little bit better than what we've modeled so far. When you look at Canadian grain, we're moving more Canadian grain now, at this time of year versus what we typically move. And this is because typically, as you know, on Canadian grain, we move it all out in Q3 and Q4, but last year, some of the Canadian farmers and Canadian companies didn't like the prices on the world market, and they decided to sit on the grain. So that pushed some of that movement to this quarter, and grain is up 25% on a year-over-year basis. When you look at the merchandise business, merchandise business is up 10%, led by P&C up 17%. I would tell you, and then lumber is stabilizing.
If you remember, we talk about lumber in the car orders per week, and these are center beams, so these are the kind of the sailboat where you have the big bundles of lumber. If you look at last year in the trough, we were getting about 1,600 car orders per week. We finished the year around 1,800-1,900 car orders per week, and we're stabilizing pretty much at 2,000 car orders per week. So that's pretty good. That's a little higher than what we've modeled, so far, so good. I will tell you, the place where it's a little softer is in coal. If you look at coal, overall, it's down on a quarter to date basis. In Canadian coal, it was down in April.
When you look at May, it's up 6%, and these are mainly the coal West Coast. There were issues at some of the mines that are on our line. They seem to be behind us now, so hopefully that will turn around. But the coal U.S. remains soft and will remain soft in the near future. When you look at this is thermal coal coming from Southern Illinois to the terminal in New Orleans, and then going to export in Europe, and that demand is soft. And the low natural gas prices as well is not boding well for that. But just to put this in perspective, coal for CN is about 3% of our book of business, so it's relatively small versus some of the other commodities we're moving.
So that's on the volume side. Just want to give a heads-up to people as well, because we said it last week, that from a fuel standpoint, you can expect to have a bit of a headwind again in the Q2 on a year-over-year basis. We've quantified this or estimated this to be about $0.10 a EPS or 140 basis point on diluted to the OR if fuel prices remain the same in the Q2. I think I'll pause there, and I'll turn it over to my friend, Derek, to give a couple of comments on the operations.
Yeah, no, thanks, Ghislain, and I'd say over the last 24 months, the railroad's run extremely well. You know, one thing we discussed briefly in our Q1 call, but since 2017, our Q1 operating metrics for Q1 were the second best we've had since 2017, only surpassed by Q1 of 2023, for example. So the railroad's running and it's in a good spot right now. You know, when you do comparables, too, you know, not we're gonna gain the inches right now, there's always room for opportunity, but metrics are at where they need to be or we're close to it. You know, car velocity this morning was 219, for example. You know, for my CN folks on the webcast, 220 is where it needs to be, but well, 219, I'll take it for today.
But, you know, when you, when you look at it, too, coming out of some of the challenges post-COVID with the, the industry, including us, with some service challenges, we're in a bit of a different spot. We had some challenges, but our base coming off wasn't as big as an opportunity. When you look at our LSCP or our Local Service Commitment Performance, we're at the 92%, so that measures, did we get our customer the right car on the right day and in the right switch window? And that's really important from a service point of view, and look at what we're doing in our growth trajectory, and that's up 6% from last year, and we're maintaining that through Q2 right now.
So that's a really important metric that I look at operations every day, as does Pat and our respective teams. And then I'll close with some of the volume stuff Ghislain mentioned. You know, the manifest is up about 10% in change, really driven by P&C right now. We've been able to absorb that growth at a lower incremental cost right now. That fits in our existing manifest package, so-
Mm-hmm
... you talk about delivering some operating leverage, that's been a nice see for us there. Intermodal has been very strong off the Canadian west coast, both in Rupert and in Vancouver. We did have to add about 6-8 train starts a week on that, but those new train starts are between 9,000 and 11,000 feet, so they're already full or relatively full where they're going. Some opportunity to grow a little bit there, but you know, Pat and I will review that plan. If more volume comes online, we're ready to handle it accordingly. And then lastly, Canadian grain, very interesting here in May. A lot of grain still moving. Now, to his point, you know, Q4 last year, the markets didn't really allow for what would usually move in Q4.
We're seeing a lot of that move in Q2 now. And then interestingly, too, some of the, I think Statistics Canada actually upgraded the grain, a crop that was mostly in our catch basin. So we have a little maybe unexpected tailwind there as we enter Q2, but, you know, seeding's going full on now in Western Canada, and we expect, as May wraps up here, those volumes to normalize, so.
Great. So I'll start with some questions, and if you have some, raise your hand, and we'll get you involved. You know, I want to start, you know, just maybe just Derek, with kind of something I've been thinking about with CN, because you guys are doing something a little different than the others in the industry in terms of breaking up the, the COO role into two parts. And just, you know, your perspective, and Ghislain, I guess if you have thoughts, you know, watching it as it's happening, you know, how, how is this... What's the maybe the rationale for that? And from your perspective, Derek, how, how is this working so far?
Yeah, sure, no, it's a great question. We get it the more often than not.
Yeah.
But listen, the first thing I would say, we didn't really split the role. I mean, if you actually combine what Pat and I have now, it's actually more than what the former role had. So, for example, intermodal is my responsibility now from an operational point of view, the terminals, the planning, the design, so that falls under or my purview right now. And listen, Pat and I have a great relationship. We think a lot alike, we have open conversations, and you don't agree on everything. That's okay. You wouldn't want everybody to agree on anything, because it's a natural yin and yang a bit, right? You have natural things with make the plan and run the plan. There are certain things I've had to adjust on because the data shows Derek, you need to go this way.
There's certain things Pat had to adjust on because the data shows it goes that way. But I think it's a really interesting and productive approach because it also fills up... allows us the space and gives us time to really get into details that maybe is one you couldn't do. So when you look at what Pat does, when he gets into with engineering and mechanical and really giving him the space to think 3, 5, 10 years out, Scott, versus, you know, tactically, day-to-day, I'm into everything with my respective region leaders and the team. So I've been very happy with the approach. It's a great partnership that him and I have, and I believe we're delivering together.
Let me jump in here a little bit. In layman's term, the way I see this is, see, when you have a 20,000-mile network, there's always things that has happened that you couldn't plan for. And these guys become exception management experts, okay? So they come in in the morning at 3:00 A.M., they look at the screen, they look at some of the systems they have, and they look for fires, and then what they do is they put out the fire. That's his job. In the past, when you just have a COO, they would spend most of their time putting out fires and not spending enough time for the mid to long term, not spending enough time in engineering, for example. People forget that at CN, engineering is, is about a $3 billion construction company.
So not spending enough time there because they're busy to put out the fires, and they become expert at it, and if one morning there's no fires, they'll create some because they want to put it out, and they're good at it. So now he's putting out the fires, and Pat is elevating himself to look a little bit more to the mid to long term, looking at our capital needs, looking at the pinch points we have on the network, and diving into the engineering and mechanical. Remember, we're a single-line railroad. You need a locomotive reliability. If you have a locomotive that craps out on you in the NOD, on the Northern Ontario Division, this is a problem. So that's what he's focused on. So I love it because really what I see now is Pat diving in.
We've just promoted a young person called Jamie Lockwood to be the head of engineering. And I think there's tons of opportunity we'll find. Engineering is the biggest budget at CN, so just finding small benefits, because it's so big, it'll make a difference. So to me, in layman's terms, that's what it is, and like he said, the role is bigger because intermodal, that used to report into marketing, now reports to Derek. Makes more sense that way because running intermodal terminals is really operations. It's. So I think that it's worked well, and by the way, that's the way it worked before Ed retired, and it went extremely well.
So, now, to be honest, if you would have a COO that has an ego, that's more, that's bigger than the world, then maybe it wouldn't work. These guys work very well together. They're hand in glove. What's the nickname that you call each other?
Bert, Bert and Ernie.
Bert and Ernie?
We were delegated that nickname.
Hopefully some of you participated to the investor day, but you could see the chemistry between both of them on stage, and they do that day in, day out. The fact that these two characters, and the fact that they've done each other's job before as well, makes it very, very works very well. I can't speak for the other railroads, but it works very well for us, and I'm very pleased with that structure.
We're not gonna split up the CFO role, it sounds like.
Oh, you could. I mean, remember, I was fired as the investor-
How many times you've been fired in the past year, Ghislain?
I've been fired a few times, so
I just want to follow up on a few things from your opening comments, Ghislain. So, you talked about fuel as a $0.10 headwind in Q2. I think it was bigger in Q1. Once we get-
It was
... to Q3, do we sort of—does that headwind go away, or, or is there still a bit more?
Over time, typically, as you know, fuel reverts to the mean, but it does create noise in the quarter, and I think it's helpful as we get into a quarter, if there is noise... Like, if it's $0.01 or $0.02, I'm not gonna talk about it, but when it's $0.10, I think it's important for investors and for you guys to know about it.... And it's the same with the other rails, by the way. I mean, it's, we're all in the same... Like, we all have a similar fuel surcharge, and I think the U.S. railroads have a little bit of a structural advantage on fuel because fuel in the U.S. is cheaper than in Canada.
I know we're deep diving on and we do that on a regular basis to make sure that we fuel our locomotives at the optimal point. So we do all these things, but it's a similar situation with the other rails.
And you talked about international intermodal up 23%. Is that... I mean, that's, that's a lot of growth, and last year was tough. Is that sustainable? And then one thing I think is a little different, I think, right, when we, the U.S. rails talk about international intermodal strength, they're talking about that as sort of negative for mix.
Yeah.
Is that the same?
Let me give you, because 22%, what does that mean?
Yeah.
Right? Especially over comparables that were quite easy last year-
Mm
... because that's when we hit the freight recession. So when you look at Rupert, Rupert last year we did 700,000 TEU, okay? Rupert pre-Covid, we did 1.2 million TEU. When you look at quarter to date, if you annualize quarter to date TEUs we do at Rupert, we would do 900,000 TEUs, and we've modeled slightly lower than that. I hope... I think it is sustainable. and when you see, I mean, when we talk to our customers, I don't think it's gonna come back to pre-Covid, especially in 2024. Over time, hopefully it will. But like I said, we have not modeled the 1.2.
I think that would be imprudent, but when you can see, like, the customers, the orders are picking up, the retailers now inventories are, are, are normalizing, so inventories will have to be built up eventually. So, that's what we see. When you look at Rupert, when you look at Vancouver, Vancouver, we did 1.5, CN itself, 1.5 million TEU pre-COVID, and, last year we did about 1.1, and this year, Q2, annualized to date, we would do 1.5, and we've modelled slightly lower than that. When you look at Halifax, 'cause we're a three-coast railroad, Halifax has a capacity of 1.1 million TEU. Last year we did 300,000.
We did model what we did last year, and we're doing slightly lower than that, but I don't think that's, that's big, but slightly lower.
Why is Vancouver recovering all the way and Rupert not?
Good question. Good question. I think, I think it took. I think the fact that we had the West Coast port strike, I think that, as you know, some of the traffic was diverted. I think that I'm happy to report that that traffic is back. Sometimes it's just the way the vessels are being called and so on and so forth. I would not read too much into this.
Okay.
I think that Rupert, and we've, we've seen it, like Rupert, when there was some talk about some labor issues, we could see the Asian bookings destined for either Vancouver or Rupert to soften up a little bit.
Mm.
And right after, it was said that, "No, it's business as usual until there's a decision from the CIRB," the bookings went up right away to Rupert. So I think Rupert, as you know, is the gift that keeps on giving. We're very bullish on Rupert. You may have noise a little bit in a given quarter in a given year, but Rupert has, you know, lots of capacity to grow and lots of potential for expansion. And we're trying to make it not only intermodal but a multi-commodity. And now we have AltaGas with Derek. We've got grain going up there. We still have coal going up there, so... And we're working, there's a logistics park that's being built. So Rupert is a long-term play.
We just have to make sure that we grow Rupert in a disciplined fashion so that we bring the top line growth to the bottom line.
And then you both talked about grains, so maybe either one of you could take this. I thought six months ago that Q2 was supposed to be the big grain headwind quarter, but you're saying grain's up 25%, so I don't... I guess I'm... What's, what's-
I-
Changed so much versus what, at least what we thought?
Well, it's two things. You know, Ghislain mentioned, I mentioned it briefly, you know, Q4 last year, that's usually a big grain push in Canada.
Yeah.
Obviously, traditionally, the world market prices at the time, people sat on their grain. It just didn't move at the cadence that we normally see in Western Canada. And the second thing, like we said, just a little bit of gift of nature is, Statistics Canada came out and actually increased what the crop was, so you kind of had that double whammy. It was bigger than we thought, and naturally, we just had a little more rain in our catch basin. So what we've seen is that move in Q2, and then maybe a little in Q1, where it usually moved in Q4. So same product, it just shifted the timing of it, which is-
And Derek, you said you think it normalizes at some point?
Yeah, I think by the end of May, you're gonna see it normalize. Listen, they're already seeding in Western Canada right now, so this is a bit of a movement of what they wanted to do later last year, but, you know, we do see this normalizing, say, by the end of May, very early June, 'cause now they're focused on seeding this year's crop.
Okay. Derek, I know you talked about this some... You guys talked about this some last week, but just give us the latest in terms of update on the labor front. Sounds like any potential work stoppage has been pushed out two months or so, but what's the latest?
Yeah, no, listen, we're gonna keep this tight. I know Ghislain and Patrick actually talked about this quite a bit at the last two conferences, and that's out there. But, you know, at the end of the day, I'll let Ghislain jump in, but from an operational perspective, I'll focus on, you know, my analogy is it's like a winter storm, right? It may be there, you may not know how big it is or when it's gonna happen, but we prepare for those things, right? So from a... Regardless of where this goes, there'll be an organized shutdown plan if it gets there. We obviously have a negotiated solution. We're still talking with them, to be clear. At the same time, it'll be a very organized startup, right?
I think for me is, there's been some talk about the multi-commodity or looking at different things, you know. The railway is a network business. To carve out, you know, you need to move this or that, obviously, if there's a ruling, we shall abide by the ruling, but when you look at it holistically as a network business, you can't just move one commodity. The railroad doesn't function that way. So maybe Ghislain will give you-
You covered it well, buddy.
Just two real quick follow-ups there. So, are you guys still trying to make a push towards hourly labor deals, or is that now not on the table?
The new, I think we've posted the new offer on our website, and right now I would tell you the hourly deal is off the table.
And then if they sort of mandate, you know, certain products as essential, how much harder is it, and there's a work stoppage, but certain products have to move 'cause they're essential? That sounds hard.
Yeah, it is hard. Nothing's easy in life at the end of the day-
Right
... but listen, you know, we respect the regulators and what may come out of that, and if that's what they expect us to do, we shall do it. But, you know, we can have the discussion about essential services per se, but doing it on a commodity-type basis though, that is where we just feel that's not appropriate. But if that is the end of ruling, we'll obviously comply with that ruling.
Yeah, I would say, I mean, you covered it well. No need to add anything.
Okay, let's talk about pricing. Where are we in terms of, you know, sometimes you actually give some specific comments in terms of same-store pricing. Give us an update-
Yeah
... where we are relative to inflation. Are we, are we seeing-
I think we continue to price above real inflation. I mean, I know we don't give it out. We don't give a number like the other rails, and I know there's different ways to calculate same store and all that stuff, so, you know, the industry doesn't give it out. But I can assure you that we are pricing above real inflation. And, you know, getting pricing is never easy. I mean, you know, I'm not going to a customer and saying, "I'm going to increase your price by 7%," I'm going to get a hug. I mean, that's-
... you know?
But the fact that our service is as good as it's ever been makes it easier. And I mean, he talked about the local-
Yeah, LSCP, Local Service Commitment Performance.
That's right, over 90%. So we're spotting the cars, the number of cars that the customer wants at the day that they want, at the time that they want. That's a big, that's a big deal. So when you go and you have that type of service, then it helps it helps for us to get the pricing. The other thing, as you know, with the scheduled railroad operation, is you're actually able to move more product with less cars. And, and so some of those cars are privately owned, so the benefit goes to the, to the customer, which we're fine with. But then when you go and you put those facts in front of a customer and say, "Here's the price that, that, that, you know, we are asking for," it makes it easier.
So we are pricing above real inflation, and we know... Listen, we've given out guidance of 10% EPS growth. It's not one thing that we need. We need a little bit of volume, and we've guided for mid-single-digit volume growth, half of which will come from our CN specific growth initiatives. 1% will come from the fact that we don't expect a West Coast port strike, and a little bit from the economy. The economy looks okay, like we're counting 1%-1.5%. When you look at the economy, industrial production is improving, you know, every month when you look at consensus. We're counting on that, we're counting on pricing, we're counting on my friend here to deliver some operating leverage, and when you add this all up, then you get into the 10%.
The share buyback, some people thought that it was more accretive than it really is. When you look at share buyback in the given year, and when you look at it from an after-financing cost point of view, and it's very close to or it acts very close to interest rates, it's very little accretive at all. But over the in the out years, it'll help a little bit because you get some compounding effect of having those shares out. So when you get all of these points together, then that's... And I'm hoping that these CN specific growth initiatives, as I said, half of which will make up our volume this year, you get a compounding effect of the out years.
Because remember that now you get the full year effect of some of the projects that came on board in 2024, and hopefully, as you get from the economy, and we talked about industrial production, we're assuming, you know, slightly positive industrial production in 2024, call it 0.5%. As you get closer to our 2% in the out years, then I'm hoping that we will get from the 10%, more into the middle or to high end of the range. And remember, our range for 2024, 2025, 2026 was between 10%-15% EPS growth. So I mean, things are unfolding and there's noise, there's noise on, on labor, there's noise. There will always be noise. I mean, we're a big multinational company covering the entire continent, but we're dealing with this.
And the last point I would say, which you cannot underestimate, is the team is coming together. The team is coming together, and I'm very pleased to have Rémi on board. That he's got big shoes to fill with Doug MacDonald, but we're coming together, we're working together, we trust each other. And you can have the best network in the world, the best locomotives; if you don't have the right team in the right spot to deliver and convert this into value for shareholders, then you have nothing. And I'm happy because I can see that team coming together, and it's quite phenomenal.
Just a couple of quick follows. There's always going to be noise, but as we stand today, the 10% EPS growth for the year, do you feel confident about that?
I feel confident about it, absolutely.
On just the back to the pricing discussion, we've been in this period of elevated inflation. How have you guys evolved from a, you know, mix of multi-year contracts, contracts tied to inflation indexes?
Yeah
... contracts with fit? Have you done anything different to, to make sure that you're better protected in a world of-
Good question
... of higher inflation?
Good question. In fact,
I was due for a good one.
Yeah, exactly. So in high inflation scenarios, we have a tendency to go after shorter contracts, to your point. Now, as you know, there's about a third of our book of business that expires every given year, so we will have a tendency to push more short-term contracts. When we have, when the customer pushes us or we agree to have a longer-term contract, that's why we tie it to some type of index for the out years to make sure that the out years will be, will be higher than, than real inflation.
So there's typically a cap, there's typically a floor, but the purpose is to make sure that, you know, let's say we have a 3-year contract, year 2 and year 3, there's some type of index that's tied in so that in those years we have a reasonable inflation plus pricing for these out years. That's the purpose.
But I think that's an important sort of point, if I'm understanding it right. So there was, you know, a contract that you repriced three years ago, years two and three, even if it had an inflation index, had a cap, and that-
Some of them had a cap.
That cap may not have fully captured how much inflation. To the extent that we're now repricing it today, right, the cap now you're changing-
That's right
... or something like that.
Exactly.
Okay. So-
Exactly.
That's interesting. Let's come back to you, Derek. You talked about car velocity, 219, you know, want it at 228. Is that something that over time do we want to take that even higher or, you know, I guess you said overall the network's running really well. Are there incremental improvements that we want to be making in the network here?
Yeah, listen, it's all about a game of inches at this point. Look at our performance internally, year-over-year, you know, we're in a good place, but there's always opportunity out there every day, right? From a tactical point of view, you know, can you get this connection faster? Can you, you know, move this train an hour here, hour there? But it is a game of inches. You know, when you look at where we're at, whether it's a car velocity number, different industry, a dwell type vendor or dwell type metrics. So, you know, looking forward, you never cap yourself, of course, you know, it's continuous improvement, but that's what Pat and I are charged with every day, right? That's what we look at every day. What can we tweak here? What can we tweak there?
So I would never say it's a 220 is the right number, but, at the same time, what I will tell you is when you really look at our metrics year-over-year and quarter-over-quarter, we're running a good railroad out there.
And so what does all this, all of this mean for headcount? Do we need to be-
So-
... cutting headcount? Are we stable?
So listen, right now it's attrition. It's a one-for-one basis on attrition. You know, as the year goes on, we look at different things. It may not even be a one-for-one. There's some operating leverage. You heard us talk about the manifest package right now, right? So when you look at different things, you know, attrition is something we keep up on, but at the same time, it won't be one-for-one in every single place. Now, when you do look at it overall, are there pockets of growth with line of sight there? You know, we gotta keep in mind it takes 6-9 months to get a qualified conductor nowadays with what we do.
So there's some small pockets where we have good line of sight on volume that we have to do that, yes. But overall, the plan is deliver on the operating leverage, with the headcount.
So with RTMs up 8%-9% in quarter to date, how do we think about train starts or something like that?
Yeah. So, you know, train starts rising now. Now, obviously, volumes are up significantly, but our manifest starts are fairly flat. The intermodal starts are obviously, as I mentioned, 6-8 a week up. That's been significant volume that's come to our network, and we've had to plan accordingly there. And obviously, you know, as you look at the bulk starts, obviously they're a little more up and down with the bulk commodity. It can be cyclical, different things as grain winds down here. But, you know, overall, the focus is really holding the line on the manifest starts. We know we can grow incrementally there. The intermodal, we're at a good spot now. If something changes, we'll react accordingly to it.
So, Ghislain, all with that all sounds pretty good from an operating leverage perspective. I know we've got a fuel headwind, but is this sort of... Is this the quarter where we sort of start to break through again and, and start seeing a year-over-year margin improvement?
Listen, we've committed to deliver better margins on a year-over-year basis, and what we call operating leverage. I think that we've committed to that. We have purposely not given a number. And if you remember, the OR last year was one of the best at 60.8, so we committed to improve our margin from that. When you look at and from a seasonality standpoint, if you look at quarters, as you know, the quarters, the quarter that's typically the highest OR is Q1. The quarter that's the lowest, typically OR, everything staying equal, is Q3, and then Q2 and Q4 is in the middle. Q2 depends on how it thaws and how it melts in Western Canada and the prairies, and Q4 depends on how the winter hits you.
Stay tuned, but like I said, we're continuing to commit to deliver operating leverage on a year-over-year basis.
Do you think that starts in Q2?
We'll see. I mean, stay tuned. I'm not gonna give guidance on a quarterly OR, but you'll see.
Sure. Sure. And then maybe just sort of last question, so we're running out of time, but, you know, I think back to your Analyst Day a year ago, you talked about a lot of, you know, incremental volume opportunities, you know, between port expansions, renewables-
Yeah
... you know, lots of things. Where are we in terms of, I think it was like 800,000-900,000 total.
Yeah.
Where are we in realizing this?
So obviously, in our three-year guidance of 10%-15% EPS growth, we didn't assume that all of this was going to happen. Because if you do the math and you assume that all of this would happen, then we would be higher than the 15%, trust me. I think we're right on track. I think that, you know, it's starting to pay dividends. As you know, out of our mid-single-digit volume growth for 2024, call it 5% for discussion purposes, half of them will come from these initiatives. So, we're right on track. And what I like about this is the fact that, we're not gunning after one initiative, okay? They're all singles and doubles, and they're diversified from a commodity standpoint, but also from a geographic standpoint.
So if we're wrong on one, and it's a little bit smaller than we thought, hopefully, we're wrong on another one that's bigger than what we thought, and we have the law of compensating errors. So, so far, so good. We're tracking very closely to it. We're tracking not only at the operating committee, that I facilitate with Derek, Pat, Tracy, and Rémi, but also we're tracking this at the board. And we're right on, and we're right on track, and by the way, that list lives, right? So we have the list, but we're working on other initiatives. Some of them may fall off the table, but we're working on other initiatives as well that we'll add on to the list, and Rémi is pushing hard on that with his team.
So maybe as we close, because I know it's flashing red in front of us. Just as a closure, so first of all, I think, listen, CN is in a good space today under the leadership of Tracy. You know, as I said, the team is gelling, the team is coming together. I'm very fortunate and pleased to be still there. And, you know, I'll stay there as long as she wants me to stay. We're having fun. I think, yes, there's always, you know, noise.
There's always issues, there's always lots of things, but when you look at our performance in the last two years since Tracy joined, it's been quite remarkable, and we're not done, and stay tuned, and I think that this company is in very good hands with its current leader.
That was great. Ghislain, Derek, thanks so much for being here.
Thank you.
Appreciate it.
Thank you.