The head of KiwiRail says the company is making progress with its turnaround strategy, despite natural disasters and tough economic conditions.
Two years ago, the Government and the state-owned rail operator announced a plan to improve the company's business model by 2020.
At a transport forum in Wellington on Wednesday, chief executive Jim Quinn said freight volumes have picked up and the company is focused on providing a better customer experience as well as on investment which brings returns to the business.
He said that investment requires a balancing act between over-investment and investing to ensure KiwiRail was meeting customers' needs.
"We need to make sure we've got the longest trains that we can practically have.
''We need to make sure those trains are full every day and if we do that well then the business will unleash what it is capable of - so long as we continue to improve the serviceability: the way we respond, the way we react. "
Mr Quinn told the forum that the Christchurch earthquakes and other natural events have hit the company since it started the turnaround and its ferry business is struggling to bring in decent returns because of a sluggish international tourist market.