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I will now provide an update on our top line followed by Mike's overview of our operations, and Ghislain will follow with financials in our updated guidance.

Demand is currently strong, and the demand outlook for the remainder of this year is strong as well and broad-based. This is why we are working diligently on adding capacity and resiliency to our network. Volume is -- as expressed in revenue ton mile in the last quarter, was up 7%. Same-store price for Q2 was up a solid 4%. Sequentially, remember in the last quarter, it was up 2.7%. Core pricing from recent renewal concluded in the last 90 days averaged about 4.4%.

You will recall that same-store price is a backward-looking measure of price on our full book of business as executed in the last quarter. Core pricing from recent renewal is a forward-looking measure of price trend from only the deal concluded in the last 90 days.

On revenue by commodities, coal revenue grew 39%, mainly from Canadian export coal of met coal to Asia and U.S. export coal of thermal coal to Europe. Grain and fertilizer revenue was up by 12%. Our grain volume was up in both Canada and United States. This year's Canadian crop and carryover looked fairly promising. Our frac sand segment executed in the previous quarter -- exceeded, I'm sorry, our previous quarter record, and was driven mostly by strong demand in Western Canada. We see the same outlook in the short term with regard to the frac sand business. We are constructive about continued volume growth in lumber and in base aluminum volume. Our steel -- on steel, our largest steelmaking account is in the United States.

Crude by rail, the revenue was up compared to last year because of better pricing. In the second half, we will have more capacity; therefore, we will also be able to execute a bigger book of business of crude. We are taking delivery of 16 new G horsepower locomotives, and that will be helpful to our crude business.

Lastly, on intermodal segment, the revenue grew by 6%. The increase last quarter was mainly traffic related to the Port of Prince Rupert and the Port of Montreal. And on domestic revenue, which was also up -- it was especially up on the ramp-to-ramp business with our wholesale account. We did have new shipping line customers at the Port of Vancouver as well as new shipping line customers at the Port of Prince Rupert.

Concluding on the commercial overview, price trend is up from renewal and also from new business, reflecting tighter supply of transportation capacity. On volume, our growth will follow the completion of our new sidings and new section of double-track capacity.

I will now turn it over to Mike. Mike gives you an update on our operation. Mike?

Mike Cory -- Executive Vice President and Chief Operating Officer

Thank you, J.J. And even though Butcher beat me to it, I just want to congratulate you on a well-deserved promotion.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Mike Cory -- Executive Vice President and Chief Operating Officer

We're all very proud and we're honored to work for you and with you. So, hello, everyone. I want to first of all thank the railroaders of CN for their efforts in delivering these results. And it's been in an environment that really is still lacking resiliency when you think about our operation. While we still have work to do, these results show the commitment of this operating team to both our model and especially to our customers. As we stated on our Q1 call, this quarter was centered on catching up on the volume, gaining back the confidence of the customers, and sequentially improving our operating metrics in line with reducing cost.

Overall, we saw better operating performance in the quarter, where we handled the largest workload in CN history. To put this into perspective, gross ton miles were up 8% versus Q1 '18, and this was 5% greater than the highest workload in our history. And that was recorded in Q1 of '17. Further, our overall workload was 23% higher than during the same period in 2016. Now, the importance of this comparison is that in Q2 '16, we have the low point of workload in recent past due to the downturn in demand. And in the two years between then and now, the infrastructure has changed very little, especially in the high growth areas in Western Canada and our Southern region, where we've seen growth as high as 35% in some of these corridors.

Outside of winter conditions being behind us, a large factor in our ability to deliver this volume is our hiring and qualifying of operating employees. In the second quarter, over 350 employees qualified as conductors. In the quarter, we hired close to another 900 conductor trainings across our system, and they'll become qualified in Q4.

On the safety front, these new employees have had an impact on our performance. Now, safety is a core value with CN, and this leadership team stands united in making the culture the safest in the industry, regardless of the challenge that that volume growth and that new employees bring. In Q2, our FRA accident ratio increased versus Q1. Although, with our commitment to investment and hardening our infrastructure, our mainline accident ratio continues to improve. Our area of increased accidents is within yards. Over two-thirds of the overall accidents are on non-main track, and those are primarily in switching yards. These are lower risk as they generally occur at slower speeds. In addition, it's where the majority of the work is performed by new employees. Our FRA injury ratio improved over Q1.

We're focused on and we're improving our approach to proper onboarding and integration of these new employees through various initiatives, such as targeted regular interventions, especially with employees with less than two years' experience, we're engaging in the frontline, and that's where the rubber hits the road. As well, we're completing overhaul of classroom and field training programs, and we're working with our union partners to provide on-the-job training with qualified instructors. We fully expect that focus and especially leadership will result in the improvement we seek. And each one of us around this table and out in our vast railroad is committed to making this happen.

So, looking specifically at Q2 operating metrics, train speed increased 4% versus Q1, and this in itself drives locomotive utilization, which was up 7%; car velocity, which is up 23%; and terminal dwell, which was down 20%, all versus Q1. And we expect sequential improvements as we take possession of new locomotives and rail cars, and more employees become qualified to perform work. And of course, with the completion of our capacity projects in Q4 of this year, we're gonna see the resiliency we've not had in the near past as volumes have grown, especially over our busy corridors.

In the past few weeks, we completed the majority of our major work blocks for basic track infrastructure. Most of this work was over our less resilient core mainline between Western Canada and Chicago. Along with some flooding in our Minnesota and Wisconsin corridor, these work blocks have impacted our performance over the last two weeks of Q2 and for the first three weeks of Q3. But we are certainly rebounding as I speak. And if you flip to the next page of my presentation, you'll see an overview of where capacity projects were being built in 2018.

Now, growth isn't equally spread across the network. It's prevalent mostly on our Western and Southern regions, and this is where most of the projects are taking place. The projects, and they're an all-time record, are progressing quite well. Five projects are completed, primarily in the Southern region, with one of those being in the West. And the majority of the projects will be completed and produce benefits into Q4. Finally, with all the volume growth and the capacity improvements we are making, we're adapting our scheduled operating plan to meet the changing demands. This will ensure our precision railroad model continues to lead the industry in both operating ratio and service offering.

Our design team, with operators in the field, are at work. They're using our precision railroad standards to convert the volume growth opportunity into lower OR and better service delivery. Our focus on scheduling the workload of assets, whether they be car inspectors, locomotives, or track capacity, is embedded in our DNA. To put it simply, it works. This focus will produce the right balance of cost and profitable growth as we continue to leverage our precision railroad model. From a quarterly perspective, workload's grown 23% since 2016, and the challenge is to adapt our precision model to this and more, as we continue to grow CN's business efficiently.

The mix of business has evolved over this time with more unit trains and more Western Canadian activity with intermodal to the U.S. In addition, we see growth in our branch line feeder systems throughout our Southern and Western regions. These are all great challenges we are facing, and we're facing them had on. We're showing the precision railroad model works through high volume growth and through low volume growth or decline.

In closing, how we work is not gonna change. Precision railroading is our gold standard, and this is crystal clear in our leading -- industry-leading operating ratio. This leadership team knows that we can use this strong base while evolving our operating and service plan to fully realize the results of our comprehensive strategy. We're pleased with the performance of the team this quarter, but in no way are we satisfied. We know as we add our capacity and assets, we schedule the activities as we know how, we'll deliver the results our customers, our shareholders, and all of you expect.

So, with that, thank you, and over to you, Ghis.

Ghislain Houle -- Executive Vice President and Chief Operating Officer

Thanks, Mike. Again, congratulations, J.J., on your appointment. It's well deserved. I'm very pleased with our turnaround, which is demonstrated by our strong financial performance in the second quarter. Starting on page 10 of the presentation, I will summarize the key financial highlights of this quarter performance.

As J.J. previously pointed out, revenues for the quarter were up 9% versus last year, at slightly over $3.6 billion. Fuel lag on a year-over-year basis represented a headwind of roughly $30 million, or $0.03 of EPS, mostly driven by an unfavorable lag this quarter. Operating income was slightly over $1.5 billion, up $104 million, or 7% versus last year. Our operating ratio came in at 58.2%, or 70 basis points higher than last year. Higher fuel prices accounted for 150 basis points of this increase. Also, the new GAAP pension accounting reclass resulted in a 210 basis point increase to the operating ratio in the quarter. Net income stood at $1,310,000,000, or $279 million higher than last year, with reported diluted earnings per share of $1.77 versus $1.36 in 2017, up by 30%.

Excluding the impact of nonrecurring asset sales in 2018 and the impact on deferred income tax recovery from the enactment of a lower provincial income tax rate in 2017, our adjusted diluted EPS for the quarter was up 13% versus last year. The impact of foreign currency was unfavorable by approximately $30 million on net income, or $0.04 of EPS in the quarter.

Turning to expenses on page 11, our operating expenses were up 10% versus last year, at slightly over $2.1 billion, impacted by higher fuel prices, stronger volumes, and operating metrics that still remain below last year's levels. Expressed on a constant currency basis, this represented a 13% increase. At this point, I will refer to the variances in constant currency. Labor and fringe benefit expenses were $648 million, 8% higher than last year. This was mostly the result of higher wages, driven by increased head count and training costs for new hires, partly offset by higher capital credits and a U.S. payroll tax credit of roughly $15 million resulting from a Supreme Court decision. Purchase services and material expenses were $478 million, 13% higher than last year. This was mostly the result of higher outsourced services and repair and maintenance costs, and higher level of activity in trucking and transload services, partly driven by higher volumes.

Fuel expense came in at $436 million, or 37% higher than last year. Higher fuel prices accounted for close to $100 million of this increase, while higher volumes were a $16 million unfavorable variance versus 2017. Fuel productivity was favorable by 1% in the quarter versus last year. Depreciation stood at $330 million, 3% higher than last year. This was mostly a function of net asset additions, partly offset by the favorable impact of some depreciation studies. Equipment rents were up 14% since last year, driven by lower car velocity that increased our car hire expenses, and from additional locomotive leases. Finally, casualty and other costs were $108 million, which was 4% lower than last year.

Now moving to cash on page 12, we generated free cash flow of $1,296,000 through the end of June. This is $363 million lower than in 2017, and mostly the result of higher capital expenditures and cash taxes, partly offset by higher net income.

Finally, let me turn to our 2018 financial outlook on page 13. While we need to be mindful of current trade tensions, the demand environment remains solid in a number of different sectors, and we continue to see favorable economic conditions in North America, including positive consumer confidence. We are on track in our plan to hire crews, and on the 60 new locomotives to be delivered in 2018, we have received 10 in June, and we expect 10 more by the end of July. We are progressing on the construction of our aggressive infrastructure capacity investment plan, which is still projected to be completed in the fourth quarter of this year. We now assume that a Canadian to U.S. dollar exchange rate will be in the range of $0.75 to $0.80. With this in mind, and following a solid second quarter performance, we are revising our 2018 financial outlook and now expect to deliver adjusted EPS in the range of $5.30 to $5.45 versus the 2017 adjusted diluted EPS of $4.99. This compares to our previous financial outlook, which was for EPS to be in the range of $5.10 to $5.25. This revised guidance assumes that volume growth in terms of RTMs in the range of 5% to 7% for the full year versus 2017, compared to a previous expected volume growth of 2% to 4%. Overall pricing remains solid, backed by our 4% same store price performance in Q2.

On the capital front, we are committed to investing in our business to support safety, service, and organic growth. We are further increasing our capital outlook for 2018 by $100 million to approximately $3.5 billion, versus our previous outlook of $3.4 billion, mainly due to the acquisition of additional lumber cars and weakening of the Canadian dollar. This record capex supports our commitment to restore network fluidity and resiliency, and accommodate long-term growth at low incremental cost. Furthermore, we continue to reward our shareholders with consistent dividend returns, and we are on track with our current share buyback program of approximately $2 billion, having repurchased over $13 million for an amount of $1.3 billion just last October.

In closing, we remain committed to our agenda and continue to manage the business to deliver sustainable value today and for the long-term. On this note, back to you, J.J.

Jean-Jacques Ruest -- President and Chief Executive Officer

Well, thank you, guys. And before I turn it over to the Q&A, I would like to add a few comments to wrap this up. Our railroaders are energized and are strongly behind the business plan. We are ahead of our turnaround plan in that we expect record improvements during the second half. We have a strong pipeline for our growth opportunities. Volume is available. With best in capex in the business, we're investing in critical talent to execute, and we are investing in technology to drive efficiency and improve cross-leadership. In regard to our operation, we will have quite the network by the fourth quarter, entering 2019 very fit to serve our customers and produce results in our strategic agenda of organic growth at industry-leading cost. We're optimistic about our future, and that's why we revised the 2018 guidance upward.

So, Operator, we can now turn it over to the Q&A.

Questions and Answers:

Operator

Thank you. Please press *1 at this time if you have a question. There will be a brief pause while the participants for questions. Thank you for your patience.

The first question is from Ken Hoexter from Merrill Lynch. Please go ahead.

Ken Hoexter -- Merrill Lynch -- Analyst

Great. Good afternoon. And J.J., congratulations again. I'll throw it again. It's just been great working with you over the years, so congrats on the new title. But when you think about your long-term target, now your 58 OR, are we looking at, despite the pension adjustments, are you still aiming to get to the mid-50s? Just want to think about this, because before you launched the big capex program, your EPS outlook now is actually above that original target, so it seems like you've more than offset all of that impact. I just want to understand your thoughts on operations and cost as you think about the topline growth you've put in.

Jean-Jacques Ruest -- President and Chief Executive Officer

Well, thank you, Ken, and thank you for the kind words. On the OR, rather than just targeting specific numbers, what I'd like, in relation to where the industry will be in the next few years based on exchange, based on price accrual, based on economy. Our objective is to be in the leading pack of operating ratio, if not the pack leader. So, if the industry is able to do slightly better than what we've done here today, then we think we can probably achieve that as well. So, in relation to our peers and where the economy and the cost of fuel is, we want to be in the leading pack, and hopefully the pack leader from time to time, like in this quarter.

Ken Hoexter -- Merrill Lynch -- Analyst

Great. And I think there was just one. No follow-up, right? So, thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question's from Cherilyn Radbourne from TD Securities. Please go ahead.

Cherilyn Radbourne -- TD Securities -- Analyst

Thanks very much. Good afternoon, and congratulations, J.J.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Cherilyn Radbourne -- TD Securities -- Analyst

I think I'm gonna pick up on Ken's question there. As he observed, your revised guidance is a nickel higher on both ends versus the original guidance given at the beginning of the year. Do you think maybe you can help us sort of think through the moving parts there in terms of the volume backdrop, you know, a more positive pricing environment? And then clearly, you surprised yourself in terms of the operational performance in Q2?

Jean-Jacques Ruest -- President and Chief Executive Officer

Okay, so let me start, Cherilyn, and then Ghislain can add a few things. So, definitely, when we look at our network, we think our network will be able to execute more volume in the second half. And because that volume, we already have line of sight on that volume, we were able to put that volume back into the forecast because we think we can execute based on the onboarding at capacity that we're doing right now. That's number one.

Number two, the pricing situation is slightly better than what we had forecast or what we had in mind back in April is not -- our 4% same store price is indicative of that, and the pricing environment I think for all of us is also getting slightly better. And then you have the moving parts on the exchange rate. So, I don't know if you want to add some comments there.

Ghislain Houle -- Executive Vice President and Chief Operating Officer

No. I would reiterate, J.J., first of all, the strong Q2 is obviously something that we are factoring in into our yearend outlook. And as you know, Cherilyn, every quarter, the team sits together with the marketing team, operating team, and we look at what we see forward, and we do that exercise now every quarter. And this quarter, we did that exercise, and to J.J.'s point, we feel very comfortable that demand is out there. We definitely performed better in Q2 than what we expected coming into the quarter, and we feel that this capacity, coming in on the infrastructure investments, including the locomotives and the crews, will allow us to deliver the volume growth on a full year basis that we've outlaid between 5% and 7%, so.

Now, we have some work to do. This is not gonna be a walk in the park. This is -- but for now, this is our best foot forward. But we have work to do to deliver this. But I think as a team here, we're comfortable that we can deliver.

Jean-Jacques Ruest -- President and Chief Executive Officer

That's right. We had a fairly solid second quarter, maybe slightly better than we thought we were get the last time we had a call in April.

Cherilyn Radbourne -- TD Securities -- Analyst

Thank you. That's my one.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Your next question's from Allison Landry from Credit Suisse. Please go ahead.

Allison Landry -- Credit Suisse -- Analyst

Thanks, good afternoon, and congratulations on the good quarter.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Allison Landry -- Credit Suisse -- Analyst

Another question on pricing. I mean, obviously, very strong in the quarter. And looking back, it looks like the last time you put up something of this magnitude was in the fourth quarter of 2014. So, I'm just trying to get a sense of whether you think the pricing momentum has reached a peak. And I apologize if I missed this earlier, but if you talked at all about what the renewal rates were trending at. So, really just looking to get some color on some of the factors that we need to consider in terms of what might push that or present up or down in the second half.

Jean-Jacques Ruest -- President and Chief Executive Officer

Okay, thank you, Allison. So, the same store price for the second quarter was 4%, and what we call the forward core pricing, which was based on the renewal in the last 90 days, stood at 4.4%. And regarding what we might expect in the midterm here, remember, our view is really based -- our strategy is based on inflation, price inflation plus pricing, and also based on having a compounding effect over time. It's a marathon, not a sprint. So, if inflation today is at 2.-something%, and we have 4% same store price, that's really what we -- that's really a really good range, a sweet spot range for the rail industry. And I think that's -- we have to be mindful that that being a marathon, I think that's a range that for it to be sustainable, we need to be mindful of the overall marketplace. So, I would describe 4% as a very, very solid same store price. And I think, taking into account where rail inflation is today net of the fuel, I think that's really good. I don't know if that helps.

Allison Landry -- Credit Suisse -- Analyst

Okay, great. Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Fadi Chamoun from BMO Capital Markets. Please go ahead.

Fadi Chamoun -- BMO Capital Markets -- Analyst

Yes, good afternoon, and congratulations, J.J., on your new role as well.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Fadi.

Fadi Chamoun -- BMO Capital Markets -- Analyst

So, I just wanted to go back to the demand side. So, your work that you've done on the network, I'm just trying to gauge if next year is as strong as this year. Say demand is somewhere behind five and high single digit, is the network going to be in shape, given the project that you've completed and what you plan on doing, to handle that? And then also, if you look at your yard and then what you've been doing on the yard, are you gonna be in kind of shape enough to handle the growth, or is there more that you have to do from a capacity point of view in order to keep that growth momentum kind of going? Related to that as well, your RTM guidance, 5% to 7%, was 1% in the first half, really applies kind of double-digit in the second half. If you can give us kind of one or two key drivers of that volume as we go into Q3, Q4, and if this is kind of biased toward the fourth quarter, or how does it kind of play out between Q3 and Q4?

Jean-Jacques Ruest -- President and Chief Executive Officer

Okay. So, there is many aspects to your question, but this is a very good question. That's something where we've done the work lately, and we're still going through some of the details. I will start, and then Mike can add on. If you look at page eight in our presentation today, the one with the map, it will give you a sense of what it is we're working on capacity-wise, and also where the business is coming. So, when you look at the second half of '18 and what business we would like to onboard in 2019, our guidance for 2019 when we put it up in January will be the trade-off between demand and capacity. So, demand, I think, is gonna be -- is not really the issue. I think we foresee being able to have generated demand or good same demand that will be keeping our network really be in Western Canada. Just think in terms of Chicago, only west, especially from Winnipeg to west. Busy corridor, a lot of demand. And the challenge is not so much the demand. The challenge is how much capacity can we create at a time.

So, what we're building this year, this summer, is not only to meet the demand of November/December. It's really to build a railroad for the first five months of 2019. And then after that, Mike is gonna be providing, at the end of the summer, a capital plan for 2019 to build a railroad for the month and maintenance beyond. And that's why, depending on how much capacity we can execute next year with a capital budget that we will decide to go forward with, that will be where we will put the trade-off in terms of the RTM gross. I don't know, Mike, if you want to add about what we're doing in terms of adding capacity, just in broad terms, for 2019 in the West.

Mike Cory -- Executive Vice President and Chief Operating Officer

Yeah, you know what, Fadi, we'll be looking at -- I wouldn't say identical to what we're doing this year, but obviously, Western Canada, there's still pockets of resiliency we're gonna need volume and growth to attack next year. But we'll really be focused also on our corridor at this point from Winnipeg to Chicago. Minnesota, Wisconsin, all through that area is gonna be the next piece of the bubble as it moves. But other than doing a bit more there, our focus will still be through the breadbasket of the prairies and to the West Coast ports. That's where the majority of the traffic is looking to be growing, and that's where we'll look for the capital programs for next year.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. And in terms of giving you color, what market is conducive to generating that volume growth, you have the port business on the West Coast, Rupert and Vancouver. You have Canadian coal lines, a number of them -- three of them, actually, are gonna be opening up between late this year and early next year, the trio of them exporting via the West Coast. You have the Canadian forest product, which is doing very well in pulp and in lumber. We're still not quite able to meet for the lumber business demand just yet. Sand in Northern B.C. and Northern Alberta for all drilling activities; the German chemicals around Edmonton; the grain business, there's -- the carryover this year's gonna be one million tons more than last year. And the one that we talked about, the line, which is crude by rail, which you start from Edmonton, and then you start going east and south.

Mike Cory -- Executive Vice President and Chief Operating Officer

And they all transfer over those quarters --

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah, yeah.

Fadi Chamoun -- BMO Capital Markets -- Analyst

Okay. And how about the yard capacity? Are you OK now in terms of yard and terminal capacity, or is there more to do?

Mike Cory -- Executive Vice President and Chief Operating Officer

Oh, Fadi, this year, we're doing yard work in both Edmonton and Winnipeg, two major hubs. You know about our work we've done in Chicago. We're good in our facilities in Eastern Canada. If anything, we'll be looking at smaller projects anywhere those commodities come together, like a Prince George. But we've done work at Thornton Yard. Our yards are in very good shape. They need fluidity on the table, and to be able to get cars out of their yards onto a fluid network, so that's the big focus on top of what we're doing right now.

Fadi Chamoun -- BMO Capital Markets -- Analyst

Okay, thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Fadi.

Operator

Thank you. The next question's from Jason Seidl from Cowen & Company. Please go ahead.

Jason Seidl -- Cowen & Company -- Analyst

Thank you, Operator. And yeah, I would echo my congratulations to J.J. J.J., your Canadian competitor outlined some potential exposure to the tariff situation and gave investors some color. We do get a lot of questions on that, and I was wondering if you guys could do the same.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. Thank you, Jason. And regarding tariffs, if we look at what we know, which is what's in place today, which is duty on lumber, duty on aluminum, and duty on steel, at this point, there's actually no material effect on our result. Our lumber business is actually up, and we are increasing the size of our lumber fleet, because we don't -- we're not able to keep up with the increase in export of lumber to the United States. On the aluminum, what we move is base aluminum. We don't do the semi-finished product. So, therefore, the 15% duty on big name goods and the like is basically gonna be transferred to the marketplace. It's in the price inflation. So, that, we foresee, and we also foresee moving more aluminum for the producer in Connecticut. On the steel, it's kind of a mixed bag, because we have customers, as you know, on both sides of the border. As it turns out, our largest steel customers are in the United States, and they're a lot more likely to benefit, more so than what we might lose on the Canadian side. So, really the question is what might happen more in the future in terms of trade with China. Everyone asks that. And these things are unknown at this point. But so therefore, what I'm saying is so far, the impact has not been material. And two of the three commodities where there's a duty, the volume is actually increasing on the cross-border activities.

Jason Seidl -- Cowen & Company -- Analyst

Okay. Well, that was my one. Thank you very much.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Jason.

Operator

Thank you. The next question is from Brandon Oglenski from Barclays. Please go ahead.

Brandon Oglenski -- Barclays -- Analyst

Thanks for taking my question, and congrats again, J.J.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thanks, Brandon.

Brandon Oglenski -- Barclays -- Analyst

You know, I guess as you find yourself in the big chair now, can you just give us the postmortem on what happened? Because I think at any other railroad, this would have just been normal seasonality, like you guys hit a pocket on volume. I think CN created more of a crisis around the surface issue and got things under control pretty quickly. As you look out and maybe in the context of potential big trade barriers here, do you still have the same capex outlet that you should be spending in the low 20%? I think you, in answer to a question earlier, you said you've been given a capital budget, Mike, to building the railroad for the next few quarters into 2019. But should we be expecting to get mid single-digit, or team growth, you have to spend at these levels too?

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. So, thanks for the question, Brandon. So, really, our capital budget for next year is really tied to the volume target that we have, right? So, the more business we move this year, the more we're gonna be consuming the capacity that we're actually laying down right now. And the more ambitious or the more business we think we will have next year, then the more capex we need to expend from the month of May to be able to meet the demand of 2019. So, it's really -- maybe unlike some of our peers, we do have strong demand. And some of that demand was definitely creating that mess in the fourth quarter, second quarter -- even in the second quarter, we didn't meet all the demand. So, we're still in this partly catching up mode, then rebuilding resiliency so we can have a decent winter, and then building capacity for the business I talked about earlier that we would like to serve in 2019, and we have very good line of sight. And some of it, when you get down to the crude, which is the last piece of capital we deploy because that business may not be there three years from now, with what we call pay for play agreement.

So, the cap we spend, in our view, in my view, will remain higher than others, because we do have volume for CBT that provides a good return on that capital. So, that's really in that -- we're in that phase where we have good operating costs, and now for us to really exploit the franchise that we have, we need to deploy the capacity from Winnipeg west or Chicago west, so that we don't disappoint our customers, but also that we don't disappoint our shareholders by not innovating the EPS which is available to us from volume and price. So, we're already kind of at a different point of -- you know, with the evolution of precise railroading, precision railroading, and we want to be sure that we can exploit the line of sight that we have and the volume potential.

Brandon Oglenski -- Barclays -- Analyst

Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Brandon.

Operator

Thank you. The next question's from Chris Wetherbee from Citi. Please go ahead.

Chris Wetherbee -- Citigroup -- Analyst

Hey, thanks. Good afternoon. Congrats, J.J., again.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thanks.

Chris Wetherbee -- Citigroup -- Analyst

I guess I just maybe wanted to pick up on that a little bit. I'm trying to make sure I understand. So, the RTM outlook in the back half is pretty robust, and pricing, I think as you said in our renewals, was running north of 4%, so we're getting good volume, good price. When you think about the incremental margins you can generate, I know there's still some service recovery going on, but can you think about sort of the 11% to 17% implied second half EPS growth indicative of the type of incremental margins we should be thinking about going forward for the business, or are you sort of still in that recovery phase? Then maybe when you look out to '19, things can kind of resume to what you've been before. I know you're well on your way with your position railroading, but I just wanted to get a sense of maybe how to think about that.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. Ghislain, you want to pick up that one?

Ghislain Houle -- Executive Vice President and Chief Operating Officer

Yeah, sure. So, Chris, we are still in the recovery phase, obviously. As I said, we did better in Q2 than what we thought before the quarter. Q3, we've got our work cut out for ourselves, because again, most of all the infrastructure capacity investments won't be online. Some of them will come. Again, this doesn't come in one day. These come on a week-by-week basis. But most of them will come in Q4. So, now when we look at incremental margin, I'm happy to report that if you look at Q2, even without the infrastructure capacity investments on face value of our financials, you can see that our incremental margins was 35% positive. If you adjust for higher fuel prices and foreign exchange, then those incremental margins were 55% positive. So, we're still in the recovery. Again, as I said, in Q3, we have our work cut out in Q4. I mean, I think it's a pretty aggressive guidance that we put in front of us. But I think again, I think we're confident. We're happy to report that our capacity infrastructure investments are on time. I mean, they're coming on on time. We are keeping a close eye on it. And we feel that what we have as a guidance and that the volume that's coming to us, we feel confident that we'll be able to deliver that. But it's not gonna be a walk in the park. But we feel we can do it.

Jean-Jacques Ruest -- President and Chief Executive Officer

That's right. It's about the construction we're doing right now. So, Mike has commented in reference to all the work block that we have, which slowed down the network a bit, and the major rain issues that we had in the south of the border slowed down our network too. We had some track as far as we have water issues. But as we actually deploy this capital, and sometimes it is actually just straight maintenance capital, which means we have some downtime on the line of six to eight hours when the crew is working on. As these things get done, after that, we get a very good network, and we have the demand out there that we can exploit, so.

Chris Wetherbee -- Citigroup -- Analyst

Okay. That's very helpful. Thank you very much.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Chris.

Ghislain Houle -- Executive Vice President and Chief Operating Officer

Thank you.

Operator

Thank you. The next question is from Walter Spracklin from RBC. Please go ahead.

Walter Spracklin -- RBC Capital Markets -- Analyst

Thank you. Good afternoon. Congrats, J.J. I guess you made it a pretty easy decision for the board here.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Walter.

Walter Spracklin -- RBC Capital Markets -- Analyst

The two areas that you mentioned came in better -- Ghislain, you indicated your operating ratio as in expenses, came in a little -- a lot better in the second quarter than you were anticipating. And J.J., you also mentioned the pricing came in better. Can you kind of drill down on what -- on the pricing side, was it certain segments that came in better? Were you just picking up more business that allowed mix to come in better? What was the factor there? And the same way, Ghislain, on the OR. What areas did it surprise on the upside? I'm trying to get a sense of the sustainability going forward if these items came in better than what you were forecasting.

Jean-Jacques Ruest -- President and Chief Executive Officer

So, Ghislain will start on the OR, and I'll finish it up on the price.

Ghislain Houle -- Executive Vice President and Chief Operating Officer

Yeah, Walter, on the OR, I guess, as I said -- as we said before, our granular understand of what capacity can do for us is still not there, and we have a team looking into this in the email, and we'll get better at this as we move forward. But frankly, what happened was that our cost, and the fact that we now have crews and locomotives did much better for us than what we thought at the beginning of the quarter. So, again, expenses at the margin came in better. Now, expenses in our view is still higher than it should. I mean, if you look at our operating metrics on a year-over-year basis, they are lagging. And therefore -- and we knew that, and we told the market that this was gonna be the case. And we told the market, we feel that they'll come more in the flattish range in Q3 and then should be better on a year-over-year basis in Q4.

So, because of these operating metrics we're still lagging, our expenses are still higher than what they should be because we need this infrastructure capacity investment. Because again, remember that if you don't have the infrastructure, then you have a choice. You either restrain growth, or you accept growth, but at a higher cost. So, now these costs were lower than what we expected, and this is partly why the OR came in at what it came in. And Mike, want to jump in?

Mike Cory -- Executive Vice President and Chief Operating Officer

Yeah. Walter, one big benefit we had coming out of Q1, we had a backlog of coal and grain. Both those commodities move to the West Coast. They don't necessarily -- now, grain does, to a degree, but they're not stuck in that tough area of the prairies where we still have no resiliency. So, at that time of the year, going to Prince Rupert, going to Vancouver, we're very fluid. So, we took advantage of that. We caught up, and that really reduces your operating costs, to Ghislain's point. And that drove up our operating metrics also. As we saw some of that -- you know, it rains often at this time of year -- we're back in that main corridor where it's pretty tough flooding until we get the capacity put in.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. Main corridor being east of Edmonton.

Mike Cory -- Executive Vice President and Chief Operating Officer

Yeah, east of Edmonton, Walter.

Jean-Jacques Ruest -- President and Chief Executive Officer

And just on price, so we have been doing and are doing what we'll call repricing, the level of which we've been able to do in the second quarter was maybe more than what we thought. We were doing what we call upscaling because capacity being tight, at this point, capacity has a value, and that value is recognized by those who want to have more of it. And in some segments -- I'm not gonna get into detail, but in some sub-segments, we're also doing what we'll call weekly capacity management, where we manage a mix, an we upscale the mix from week to week to week. So, these different things, these different signals, these different hinges that we wrap around us eventually add up to a bigger spread between the rail inflation and rail pricing.

Walter Spracklin -- RBC Capital Markets -- Analyst

Okay. Thank you very much.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Walter.

Ghislain Houle -- Executive Vice President and Chief Operating Officer

Thank you, Walter.

Operator

Thank you. The next question's from Scott Group from Wolfe Research. Please go ahead.

Scott Group -- Wolfe Research -- Analyst

Hey, thanks, and congrats, J.J. So, I understand some of the weather issues at the beginning of the quarter. When do you think we'll start to see the RTMs get to that high single, low double-digit range that we need them to be to kind of hit these numbers? And then separately, on the pricing renewals, I think you said 4.4% this quarter. I think last quarter was 4.8%. I guess I would have thought pricing momentum would still be building. Was that just a timing mix issue, different sorts of customers? Maybe just any thoughts there.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. On pricing, when you look at the overall market environment, looking at all the railroads and municipal companies, I think although there's a view, right, that price momentum is building up, I think there may be a lag in perception. I think pricing momentum has been building up for longer and earlier than maybe observers think. And therefore, in my view, at least in the rail space, when you look at bulk commodities and carloads and the like, and long-term contract, the running rate that we have right now is a pretty solid running rate. And the proof is in the pudding of the same store price. If it doesn't show the same store price, eventually kind of where is it? So, I think taking the view of long-term sustainable and creating a compounding effect over time, we feel this 4.8% becoming a 4.4%, I think really reflects the reality of the marketplace, at least maybe in the rail space.

Regarding capacity, the issue, as Mike mentioned earlier, is when you are going west of Edmonton, that network indeed has much work, capital work, than the one east of Edmonton. And in the second quarter, with having a backlog of clean coal that needs to go west to the port and having a backlog of grain in Alberta that needs to go west to the port allowed us to ready a railroad in place, or heavy volume in a place where we had capacity. And now that some of these backlogs are caught up -- for example, we are caught up on moving clean coal from Canadian lines to the coast. Then you have to go east, and the east network is not as fluid, because the east network has these major work blocks in construction to add sidings to the whole track. As soon as you got across the border, we had this flooding for three or four weeks where we had water in some places above the track. So, lots of speed restriction on a city basis, not for half a day, but for days and weeks. And so, the flooding issue is resolved, but the construction is ongoing. I know our RTMs right now for the last three weeks are weak, and that's the reason why they are. So, I don't know if you wanted me to give more comments to that.

Mike Cory -- Executive Vice President and Chief Operating Officer

Yeah, Scott, we're planning our latter half of Q3. And then at the same time, we'll see an uptick in grain. Hopefully some of the coal. They're doing some maintenance in some of the mines, also taking this time right now. And then we'll start to see that capacity in that east of Edmonton corridor start to take hold. And so, not only will we see the -- be able to take the volume; you'll see the metrics go up. You'll see the trains move faster; you'll see the costs come down. So, that'll all start to come into play in Q4.

Scott Group -- Wolfe Research -- Analyst

So, back half third quarter is when we should see the RTMs get to that double-digit run rate.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. So, eventually the RTM will get very strong. Pricing is -- we talked about it. And the cost will improve as we're able to get the velocity back up in our network.

Mike Cory -- Executive Vice President and Chief Operating Officer

Absolutely.

Jean-Jacques Ruest -- President and Chief Executive Officer

And that will be helpful as well. You know, kind of -- you have these three pillars for the OR and the EPS.

Scott Group -- Wolfe Research -- Analyst

Okay. Thank you, guys.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Turan Quettawala from Scotiabank. Please go ahead.

Turan Quettawala -- Scotiabank -- Analyst

Yes, good evening. Thank you for taking my question, and congratulations, J.J., on the promotion there. I guess I wanted to just ask about OR a little bit as well. Clearly, obviously things are going better than expected here with regard to your operations. And I understand that there's obviously some issues still that you'll work through as the capacity builds up here. But I'm wondering if you can talk a little bit about 2019. I know, Ghislain, you've talked about an OR with a five in it next year. Can you talk about your level of confidence around that number maybe just going into next year, especially as the capacity ramps up? I know fuel can mess it up a little bit, but just assuming sort of flattish fuel here.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes.

Turan Quettawala -- Scotiabank -- Analyst

Congratulations, J.J., on the promotion there. I guess I wanted to discuss about OR a little bit as well. Clearly, obviously things are going better than expected here with regard to your operations. And I understand that there's obviously some issues still that you'll work through as the capacity builds up here. But I'm wondering if you can talk a little bit about 2019. And I know, Ghislain, you've talked about an OR with a five in it next year. Can you talk about your level of confidence around that number maybe just going into next year, especially as the capacity ramps up. I know fuel can mess it up a little bit, but assuming sort of flattish fuel here.

Jean-Jacques Ruest -- President and Chief Executive Officer

I can't have Ghislain guide for OR into '19, but he can --

Ghislain Houle -- Executive Vice President and Chief Operating Officer

We're not gonna tell you what exactly. We're not gonna guide for 2019. We're gonna do that as we usually do it in January. But I can tell you that from -- and reiterating on what J.J. said a few minutes ago, we are bullish on demand for '19. I think the demand that's out there is real. This demand and this pipeline of opportunities that we highlighted at the Investor Day, between $1.5 billion to $2.2 billion, is real, it's there. We've talked to you guys about it on a regular basis. I think that -- to J.J.'s point, I think the -- we see capital to be in line with that volume, to be in line with that bullishness. So, I think we see capex to remain similar next year to this year, because again, that volume is there. And frankly, as we've mentioned before, if you don't do that, then your OR will naturally go up, because you will just be slower as a network, and therefore, you will see things that we saw in Q1, and some of it in Q2, where our operating metrics are still lagging on a year-over-year basis; or you've got to constrain growth, which is what J.J. was mentioning.

So, I think that we're catching up, definitely. We still are catching up on employee productivity. If you look at our employee productivity this quarter, we were down. If you look at our $1 million per GTM per employee, we were negative 5%. But again, sequentially better than what we were in Q1 because we still have a lot of people that are being trained. We feel that we will recalibrate our workforce sometime in '19. And we feel that with this capacity, that our OR will come in line in a range of what you guys have been used to seeing CN deliver.

Turan Quettawala -- Scotiabank -- Analyst

That's helpful. Thank you very much. Congrats on a great quarter there.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Turan.

Operator

Thank you. Your next question's from David Vernon from Bernstein. Please go ahead.

David Vernon -- Bernstein -- Analyst

Good afternoon, and thanks for taking my question. So, Ghislain, you mentioned the $3.5 billion should be the roughly the rate that we should -- that you guys expect to be spending again in 2019, and that's gonna keep your sort of cash conversion levels down at the lower end of the range relative to the peer group. Obviously, operating ratio's a little bit higher. But I mean, isn't there a third option here? Can't you push price a little bit higher to make sure that you're not necessarily over-investing in the network to take on this volume growth?

Ghislain Houle -- Executive Vice President and Chief Operating Officer

David, we're pushing on every lever, so we're pushing on price. Where we want to accommodate growth, we want to make sure that we provide good service for our customers. We are happy that we are actually growing organically. But yeah, and J.J. mentioned it, at the end of the day, the reason why we have solid pricing, or partly the reason why we have solid pricing is because our capacity is a precious commodity, and we're getting as much price as we can. And of course, we're looking at capital to make sure that we can accommodate the growth at low incremental cost and continuing to grow this business. And the beauty with us is we are growing organically. We're growing more than our peers, and we're pretty pleased and bullish about it.

Mike Cory -- Executive Vice President and Chief Operating Officer

But we're gonna spend in lockstep with the growth.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes. The capital is to refinish the capacity that's been consumed. The more volume we move, the more we need to replenish the capacity with capital. Go ahead.

David Vernon

Sorry to interrupt. So should we think that that number then is also gonna be a little bit cyclical then? In the event that there is gonna be a little bit of a downturn, there will be some room to trim that budget as well? I would imagine that a lot of that resource is also kind of staff and people on the payroll that's in the capital line. Is that --

Ghislain Houle -- Executive Vice President and Chief Operating Officer

David, absolutely. Our plans -- as you know, our business is dynamic. Our business changes. Cycles are changing. I mean, if anything, there's more volatility in the environment than there was 10 years ago. So, obviously we do react. We've demonstrated in 2016 that we can react quickly. Obviously, it's easier to react to a downturn than it is to an upturn. We've learned our lesson in '17. And but yeah, absolutely. I mean, if there's things that happen, and therefore to J.J.'s point or Mike's point that volumes -- we see volumes being -- softening, then we'll adjust our capital in line with that, absolutely.

Mike Cory -- Executive Vice President and Chief Operating Officer

Immediately.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes. So, we have a baseline based on our view of what the economy and our customers will produce in 2019. But at the same time, we also have fallback plans based on what -- the economy might be slowing down, or things on the trade side starting to have material impact. So, this is not frozen in cement. Really,® even though we have -- we put a base plan for 2019, which we're about to put together right now, we revise that once a quarter, and we will adjust accordingly either up or down. So definitely, capex isn't related to volume. If volumes slow down, then we don't need as much capex to replenish capacity in our next Western network.

David Vernon -- Bernstein -- Analyst

All right, thanks for the time, guys.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Your next question is from Ravi Shanker from Morgan Stanley. Please go ahead.

Ravi Shanker -- Morgan Stanley -- Analyst

Thanks, good evening. J.J., can I just ask you to elaborate on how you see crude by rail as an opportunity over the next 12 to 18 months? Your Canadian peers spoke of potentially doubling their run rate over the next 12 months. Is that something that you guys see as well? And also, kind of compared to how you were looking at the space a couple of quarters ago, how are you thinking about resource allocation, the kind of contracts you're getting, and the kind of pricing you're getting in that space right now?

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. So, maybe first comment is, I'll refer to what the performance in crude by rail is in the second quarter, where our revenue was up. The volume was fairly flat. So the increase in revenue was all coming from price, and that was job one. Job one was to reprice crude by rail in a way that you would like to reinvest fresh new capital that requires a return. That was job one. Job two is, if we are able to generate enough capacity on the network, we're talking Edmonton going east and going south, and that it generated capacity such that we don't shortchange the grain industry, the potash industry, the lumber industry, I mean, all the other industries that use the network, then we will deploy this incremental capacity to move more crude to the United States, because some of these customers, even though they may not be with us long-term, are waiting now to pay for a price that generate a return on fresh capital.

So, when -- rather than giving you how much crude by rail we will move in the second half of '19, my answer is really, we will look at the bulk of business that will be long-term, and make sure we serve that demand and be a good supplier to these long-term segments and customers, and we will do -- move as much crude by rail as we can based on how much capacity is left to serve those markets.

Ravi Shanker -- Morgan Stanley -- Analyst

Got it. Understood. And congratulations on the new title.

J.J.

Thank you.

Operator

Thank you. The next question is from Benoit Poirier from Desjardins Capital Markets. Please go ahead.

Benoit Poirier -- Desjardins Capital Markets -- Analyst

Yeah, thank you very much, and congrats, J.J., for your new role. Well deserved.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Benoit Poirier -- Desjardins Capital Markets -- Analyst

My question is on -- a follow-up on the crude by rail. Could you talk a little bit about the upcoming grain crop, your expectation, and whether you are waiting for more color about the grain crop before assessing kind of the crude by rail capacity for 2019? Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

The grain crop at this point looks -- I mean, it's still early. We can have a drought, we can have excessive rain, and we can have an early frost -- many things can happen. But at this point, it looks good, and it looks to be in the last previous average or maybe slightly better. Also remember, the carryover from last year, we already are on August 1st, is one million tons more than what we had last year. So, last year, we had an 11 million ton carryover. This year, it's 12. So, I would think that the grain crop coming at us this fall is gonna be pretty good. And based on our challenge of last winter and last fall with the grain industries, we want to be sure that we are delivering services for them.

So, as it relates to crude by rail, it's really not about crude by rail demand; it's about what I just said here, how much capacity can we build this summer? And Mike can add to that. But it's -- we're actually not so concerned about the overall demand on network for 2019. That's why we're talking with the capital program that will be on the high side. And we don't want to take capacity from those that are gonna be growing grain for the next 50 years in the prairies and put that in the crude business if we can't serve the grain this fall. So, it is a trade-off that we talked about. And also, that's why I talked about how we price crude, crude pricing that supports new fresh capital dollars. I don't know, Mike, if you want to add about the grain and how we're getting ready for the next crop?

Mike Cory -- Executive Vice President and Chief Operating Officer

Yeah, no, I mean, our mission, Benoit, is to deliver every kernel or seed or whatever it is that's out there. That's a big item for CN. So, I'll go back -- J.J., I think, spoke about it earlier, about any opportunity for capacity that we see, and we played this in Q2, and we saw, by week by week capacity open up, we jumped on it. And we alerted our -- in some cases crude customers, other customers -- that we could see it coming, and then we acted on that. We'll continue to do that. So, Ghislain spoke on it right now. We're doing so much capacity, we're not exactly sure on a granular level what the exact outcome's gonna be. We feel confident it's enough, but if we see capacity show up, we will definitely go after whatever carload is out there, and if it's crude, it's crude.

Ghislain Houle -- Executive Vice President and Chief Operating Officer

That's a good point. I forgot to mention that, but in the second quarter, within the executive team, and the senior guy on the commercial side, we were managing capacity week by week. Since we had a window of two weeks of some capacity going west and going east, where the sales force was out there basically securing orders to use up the available window capacity. And that was one of the ways we've actually produced pretty good volume in EPS in the second quarter is using what we have to be more nimble. As an industry, we need to be more nimble, to use capacity when capacity windows opens up.

Mike Cory -- Executive Vice President and Chief Operating Officer

And we've got a pretty strong supply chain group, that aligns between both operations and sales and marketing, that feeds into us every piece of intel we can use to get -- to fill that capacity.

Jean-Jacques Ruest -- President and Chief Executive Officer

Very tight in-working between the network group and the marketing group.

Benoit Poirier -- Desjardins Capital Markets -- Analyst

Okay. That's great color, gentlemen. Thank you very much for the time.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Benoit.

Operator

Thank you. The next question is from Brian Ossenbeck from JPMorgan. Please go ahead.

Brian Ossenbeck -- JPMorgan -- Analyst

Yeah, thanks. Good evening, and congrats, J.J., on the promotion.

Jean-Jacques Ruest -- President and Chief Executive Officer

Hi, Brian.

Brian Ossenbeck -- JPMorgan -- Analyst

Just a quick one on the five major projects. You mentioned they were all completed on time. The capex went up a bit on FX, but how has the overall cost profile been versus the budget? And do you feel like you've got the construction capacity, labor workforce to continue spanning at the current pace, or the pace that you expect for the next couple of years?

Mike Cory -- Executive Vice President and Chief Operating Officer

Hi Brian, it's Mike. Yeah, the five projects, completed on budget. We don't see anything presently standing right in our way to not complete the other projects we have. Things can happen between now and the end of project completion. But from a permitting standpoint, from a manpower standpoint, we've got the resources. It's been a really big project for us just to get the materials and logisticate that throughout all the other commodities that we move, but the engineering team, along with our operations team, have worked hand-in-hand with Ghislain and the finance and supply procurement people. Very comfortable that we'll come in on budget. He's staring at me right now. We're comfortable we'll come in on budget, on time, and with the projects that we said we would do. And we track them extremely close from me on down. It's a weekly exercise with everybody, so I hope that answers your question.

Brian Ossenbeck -- JPMorgan -- Analyst

Yeah, it definitely does.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Brian.

Operator

Thank you. The next question is from Seldon Clark from Deutsche Bank. Please go ahead.

Seldon Clarke -- Deutsche Bank -- Analyst

Hey, thanks. And I just wanted to get back to capex for a minute. Can you give as an idea of what percentage of capex is designated for growth versus maintenance? And just, I'd imagine 2018 had some catch-up maintenance projects, so I'm kind of just curious as to why capex shouldn't come down next year kind of longer term as those maintenance products kind of go away?

Ghislain Houle -- Executive Vice President and Chief Operating Officer

Okay, Seldon, this is Ghislain. I can give you a bit of a rundown of our $2.5 billion inflow. If you look, we had about $1 billion on capacity, and if I break that down, you have about $500 million related to infrastructure capacity investments, $400 that's in Western Canada that Mike and J.J. have alluded to, and there's another $100 million of infrastructure investment that we need in our intermodal terminals. And then, so that's $500 million, and then we had another $500 million for equipment, which is basically locomotive, cars, and intermodal equipment. And then there are some of the lumber cars that I referred to in my remarks. On basic infrastructure maintenance, that's $1.6 billion, and then growth and other maintenance, it's $500 million, and then PTC, positive train control, is $400 million. So, that's the rundown of our $3.5 billion capex envelope. As we've said -- yes, go ahead.

Seldon Clarke -- Deutsche Bank -- Analyst

I guess my question was just more in terms of like, how much of that $1.6 billion in some of those infrastructure maintenance was really catch-up, because you were obviously caught a little off-guard toward the end of last year, so I'm just trying to quantify that.

Ghislain Houle -- Executive Vice President and Chief Operating Officer

There's no maintenance; that's catch-up. The maintenance, we've been ongoing, providing maintenance. Remember in 2016 when the volumes, our volumes were down 5%. Some of you guys wanted us to reduce basic maintenance, and we didn't do it, and it was a good decision, because for my team, it was easier to get the work blocks. And when you look at the installation unit cost of putting ties and rail, it was actually down 15% to 20%. So, we are not catching up on basic maintenance. We will not catch up on basic maintenance. We got caught with a lot of volume coming at us in '17, and we're catching up on capacity -- capacity meaning infrastructure, sidings, double track, mostly in Western Canada and on crews and locomotives.

Mike Cory -- Executive Vice President and Chief Operating Officer

And on our core mainline. These are 100-year investments.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah, maintenance is safety, velocity, operating ratio.

Mike Cory -- Executive Vice President and Chief Operating Officer

It's sacred.

Jean-Jacques Ruest -- President and Chief Executive Officer

Direct capacity addition is siding, double-track, bigger intermodal yard, restacker.

Seldon Clarke -- Deutsche Bank -- Analyst

Thank you, that was helpful.

Jean-Jacques Ruest -- President and Chief Executive Officer

Okay, thank you.

Operator

Thank you. The next question is from Tom Wadewitz from UBS. Please go ahead.

Thomas Wadewitz -- UBS -- Analyst

Yeah, good afternoon, and J.J., congratulations to you. I was just a little surprised the board took so long to figure it out. But I guess, in all seriousness, congratulations. Well deserved.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Tom.

Thomas Wadewitz -- UBS -- Analyst

Let's see. The question I had, I don't know if this is for you, J.J., or Mike, but looking at one of your slides, it shows the Western corridor. Do you think, when you look at Edmonton to Winnipeg, that ultimately that needs to be fully double-tracked? And when you think about it, just wondering if you can offer us some thoughts on what's the mileage between those two, and kind of what percent is double-track? And how do we think about that longer term? Is that a five or 10-year project, assuming that ultimately needs to be double-tracked?

Jean-Jacques Ruest -- President and Chief Executive Officer

We'll give that to Mike, he's my top guy. He was born in Winnipeg, so he knows his backyard really well.

Mike Cory -- Executive Vice President and Chief Operating Officer

Absolutely. Before I pass this earth, I'm hoping to see the majority of it double-tracked. That is, from where our commodities go through, so it's our bridge, it's the toughest of weather conditions of any class one railway, that will be -- every year, we'll go back. And we learned, we will not stop even when volumes go down. These are, again, 100-year investments we're making through there. I don't know the second question you had, and if that answers all your questions?

Thomas Wadewitz -- UBS -- Analyst

How many miles was it?

Mike Cory -- Executive Vice President and Chief Operating Officer

It's 800 miles and change, and probably, off the top of my head, prior to these five pieces of double-track we're doing in the quarter this year, there's probably less than 100 miles that's double-tracked. 50 of it is from my hometown in Winnipeg, a place called Portage la Prairie, and then for some reason, in the '70s, we stopped. But we had a pretty solid plan, a strategic plan -- not regardless of the volume, but any volume that comes on that, over the next few years, we will always go back in and do another piece of double-track, if not more. Again, this is year five. Next year, we're -- if volumes continue, we're looking into probably another four to five stretches.

Thomas Wadewitz -- UBS -- Analyst

Okay. I mean, is that like a 5five-year plan, or 10-year plan, or just we've gotta see what volumes do?

Mike Cory -- Executive Vice President and Chief Operating Officer

It depends on volumes, obviously, but it's a forever plan. This is really in our breadbasket.

Jean-Jacques Ruest -- President and Chief Executive Officer

It's a long-term plan. The volume pace of the capex, so it depends how fast that the capex come in, so. It's a long-term plan, that we pay for the adding capacity is how much volume we have from year to year to pay for the capital deployment. So, there's not a specific timeline. It's more volume-related than anything else.

Thomas Wadewitz -- UBS -- Analyst

Yeah. Okay. Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. This concludes today's question and answer session. I would like to turn the meeting it back over to Mr. Ruest.

Jean-Jacques Ruest -- President and Chief Executive Officer

Well, thank you for joining us today. We're really proud of the team results and how we put the quarter together. It was a challenging winter. It was challenging also from a -- for our customers, the people who do business with us. We did -- we had a very strong month of May and the month of June. July, we're -- we have this major construction here east of Edmonton, but as we're making more inroad with this work blocking construction, the network will pick up velocity, and we'll be able to meet more demand. So, demand is strong. Pricing looks good. The morale is very strong. We really work as one. The team is energized, and for that reason, we've increased our guidance, because we're optimistic about the future here ahead of us. And we also -- regardless of the discussion back and forth on trade, no material impact yet on our volume, and we think, everything being equal, things coming together the way they should, 2019 should be a very solid year as well. So, thank you. Operator, this will conclude our call.

Duration: 73 minutes

Call participants:

Paul Butcher -- Vice President, Investor Relations

Jean-Jacques Ruest -- President and Chief Executive Officer

Mike Cory -- Executive Vice President and Chief Operating Officer

Ghislain Houle -- Executive Vice President and Chief Operating Officer

Ken Hoexter -- Merrill Lynch -- Analyst

Cherilyn Radbourne -- TD Securities -- Analyst

Allison Landry -- Credit Suisse -- Analyst

Fadi Chamoun -- BMO Capital Markets -- Analyst

Jason Seidl -- Cowen & Company -- Analyst

Brandon Oglenski -- Barclays -- Analyst

Chris Wetherbee -- Citigroup -- Analyst

Walter Spracklin -- RBC Capital Markets -- Analyst

Scott Group -- Wolfe Research -- Analyst

Turan Quettawala -- Scotiabank -- Analyst

David Vernon -- Bernstein -- Analyst

Ravi Shanker -- Morgan Stanley -- Analyst

Benoit Poirier -- Desjardins Capital Markets -- Analyst

Brian Ossenbeck -- JPMorgan -- Analyst

Seldon Clarke -- Deutsche Bank -- Analyst

Thomas Wadewitz -- UBS -- Analyst

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