Ghislain Houle: So I can open up and then I can let Doug talk more, a little bit about the yield. But on fuel, I mean, I think when you look at the lag in the fourth quarter, it was around $0.04 to $0.05 favorable in the quarter and on a year-over-year basis it was as well. So it wasn’t a big deal. And I can turn it over to you, Doug, for the mix piece.
Doug MacDonald: Yeah, our traffic is relatively stable, but there is always going to be a mix component. So depending upon which product line you’re talking about, it’s going to have a very different impact. I mean, I’m not going to get on all of them on the call here, Amit, so but it’s — we can always sit down with — we’ll go and do it after. The other thing that I want to just highlight is, we did — we should not see any impact on the container storage fees moving forward into Q1 and beyond. That will have a big impact. Thanks for the question.
Operator: Our next question comes from Brian Ossenbeck from JPMorgan. Please go ahead. Your line is open.
Brian Ossenbeck: Hey, thanks for taking the question. Doug, just wanted to ask, if you can give us an update on the CN-specific projects, which you quantified at the Investor Day. It sounds like maybe some of them are moving a little bit forward faster than you thought. But how does that shape look like in 2024? Is it back half weighted like some of the broader economy stuff that you’ve been highlighting? And I think in the past you’d also given some visibility as to how much of that is sort of contracted or spoken for in terms of those carloads. So an update there would be helpful. Thanks.
Doug MacDonald: Thanks, Brian. I actually have the presentation in front of me. I know, I get this question too often, right? So when you’re talking about some of the bulk commodities, a lot of that’s going to be in the new canola crush and as well as the new mines coming online. So an example is like, obviously, BHP, we’re expecting to see some volumes there, but that won’t be till 2026. And the canola crush plants look like they’ve been pushed back a little, so it will be more back-end weighted towards 2026. When you look at the renewables, right, we’re starting to see some of that with respect to the crush plants as well, but we’re starting to see some of the renewable projects come on and some of the ethanol. But once again, that will be a little bit more back-ended, except we would — we should see some ethanol synergies this year.
The big one that we’ve managed to move forward with, obviously, is the announcement we did with AltaGas on the export of LPG. So I’ll be honest, we’ve actually hit our target already with respect, but it will be going forward. But on the going-forward basis, we’ve hit the 40,000 carloads that we had at the bottom end of the forecast just with that one contract. So that’s a huge, huge win for us. Now, the Toronto fuel facility, that’s also almost done well, it’s actually done construction in Phase 1, but we actually delayed start-up, because we sold out Phase 2 now. And we’re actually integrating the Phase 2 construction before it starts up. So that will be starting up in Q1. But that’s phenomenal that we’ve actually got it sold. So we’re actually at the high end of that one by the end of this year.
So that’s fantastic again. And then you got some of the EV supply chains, now that’s one that’s actually we’re a little uncertain now. We are — we did move about 800 carloads of product from the lithium mines from Northern Quebec for export. So that is moving forward. But with the EV pushed back a little bit with some of the announcements, we’re expecting some of that to get pushed back, but we still see all the battery plants progressing on our line. They’re still moving forward with Norfolk and some of the others. And some are still under NDA that we can’t talk about. And then the last big one is the Northern BC projects that we put forward and that we did put a siding in there last year. We’re starting to see the growth on the frac sand moving up there, as well as some of the propane coming down.
So that one is moving forward as well on target. And I’ll say the very last one was our expansion within the intermodal. So listen, we’re starting to see some progress there with the volume starting to come back. We’re working with our customers diligently both on all of our ports in Halifax, in Montreal, even St. John we restarted service there, in Prince Rupert and in Vancouver. But we also start up a new service in Gulfport as well, and we’re growing mobile. So I think, overall, it’s moving forward. I won’t be able to give you specific numbers on that one, because we’re working with our customers to sell that out. I hope that was a comprehensive answer.
Brian Ossenbeck: Yeah, no need for a second. Thanks.
Operator: Our next question comes from Justin Long from Stephens. Please go ahead. Your line is open.
Justin Long: Thanks and good afternoon. You mentioned earlier the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned? And does the guidance assume that you can improve the OR year-over-year despite these cost headwinds or will that be challenging?
Doug MacDonald: Yeah. Thanks, Justin. So the $200 million, if you wanted — breaking it out is about $100 million on depreciation. And I would say the other half, the other $100 million, call it half and half on incentive compensation and pension. And absolutely I think that having these cost headwinds, we still believe that we will improve our margins. And Tracy made the point actually that it’s tough on margins when actually volumes is down and then volume pick up. We do have space, as we’ve mentioned before, to add the traffic on some of our trains, including and especially the merchandise train. So we are — definitely believe, you know, that we will improve margins in 2024.
Tracy Robinson: Let me just add to that, Justin. I have to say that, I have been really pleased with our operational cost performance over the past two years, especially in light of some of the headwinds that we’ve had over that time. I think our record speaks pretty positively there. And it just spoke to you around you know how we think it’ll play out this year. But we’ll be managing costs closely and we expect that our margin leverage is going to continue to grow over time, as the volume strengthens. So that would be the way to think about it.
