Today, Canadian National Railway delivers more American than Canadian consumers
 FROM broken collection of bankrupt railways put together by the government in 1919, the Canadian National Railway has come a long way though most of rapid ascent has only come in the last 20 years after a lifetime as a state-owned money-losing rival to the once mighty and still privately owned Canadian Pacific Railway.
But after Canadian government privatised CN in 1995, the energised company took off. Over the next decade, it expanded significantly into the United States, purchasing Illinois Central Railroad and Wisconsin Central Transportation, among others.
Recently, CN vice president JJ Ruest led a CN team on a tour of the Far East, calling on major Asian shippers and shipping lines to sell cheaper and quicker access to consumer-rich US markets. That's because CN is now as much a railway that delivers more US consumers than Canadian.
Imagine a big lopsided T crossing Canada west to east then plunging south along Mississippi to the Gulf of Mexico and you have the CN rail map in broad outline.
What's changed in recent years is that gaps and holes in its service that once existed have been filled in, such as the 500,000 TEU annual capacity increase that has been added to the Port of Prince Rupert to its previous 850,000 TEU limit.
CN's old boast still stands that landing cargo at Prince Rupert on Canada's northwest coast - versus landing it at LA-Long Beach - will still shave three days off transit to Chicago.
This despite major improvements undertaken by the rival Union Pacific (UP) and the Burlington Northern Santa Fe (BNSF) that dominate rail services in the American west.
But while UP and BNSF have double-stacked and fixed tunnel and bridge problems, these have been matched, says the CN marketing team during its stopover in Hong Kong.
"What [UP and BNSF] face are higher costs because of the steeper grades on their lines, which mean they must burn more fuel to pull shorter trains to match our higher speeds," said CN intermodal sales chief Russ Perdue.
Prince Rupert, 750 kilometres north of Vancouver as the crow flies, will have three new quay cranes arrive next month and be fully operational to span 25 boxes by August. This is in addition to six new RTGs, seven new reach stackers, 27 new tractors and trailers.
On the way to Chicago a new fully serviced import export CN terminal has opened at Duluth at the western tip of Lake Superior, 144 miles from Minneapolis, which also brings rail service within the ambit of major importers in the agricultural and forest product sectors.
One chronic headache is supplying agri shippers with enough smaller 20-foot TEUs that can take the heavier loads needed to carry farm and forest products rather than the far more abundant 40-foot FEUs that can only carry high volume but light-weight balloon cargo.
"That's often a matter of commodity pricing," said intermodal vice president Keith Reardon. "We can get the 20-footers to them, but can they pay the re-positioning costs? That depends on the price they get for their commodity at the time."
But CN's jewel is the elimination of the Chicago bottleneck which still frustrates rivals as it once did CN - until they bought up and then forged the shortline railways surrounding the windy city into a single loop that scoots freight away from the choke point to the consumer-rich Midwest heartland - to Indianapolis, Decatur, Memphis and Jackson and then south to New Orleans and Mobile, Alabama, on the Gulf of Mexico.
This accomplishment has been matched by investment in terminals at Detroit Intermodal, which is in the last year of a five-year plan, with greater storage and an increase from two gates to six, representing a 50 per cent annual capacity increase.
At Memphis, CN invested US$5 million to add a support track and increase throughput at the gate. At Brampton, outside Toronto, CN invested C$8 million (US$5.9 million) to extend and realign switching leads to increase track use, and leased adjacent space to provide 700 parking spaces. At Joliet outside Chicago, the CN terminal increased capacity 30 per cent.
The Mobile marine terminal 232 kilometres east of New Orleans, is run by Maersk's APMT Terminals. It has two cranes, 14 metres alongside its 640-metre quay is ready to handle 10,000-TEU ships, now thought to be the optimum size internationally, and largely representative of what is expected to transit the expanded Panama Canal.
The CN team's consensus was that containerships were as big as they were likely to get and the bigger ones would be confined to the Asia-Europe trade.
At Mobile, CN's new 32-hectare Intermodal Container Transfer Facility with 3,300 metres working tracks and 3,700 of support tracks will be completed in May and have an annual capacity of 200,000 TEU.
At the Port of New Orleans five new postpanamax quay cranes will be added to the existing six ship-to-shore gantries. CN's new waterfront Container Expansion Area with its US$523 million investment included five new postpanamax quay cranes that are expected to raise annual capacity from 800,000 to 950,000 TEU.
Adjacent is a smaller US$24 million Intermodal Railyard project, which boasts of five times current capacity with one-track turnover a day and two RTGs to serve the yard.
But the major action is on the Pacific side, where it now dominates the rail sector, surpassing the once-dominant Canadian Pacific in Vancouver in recent years, representing the totality of rail service at Prince Rupert, where Dubai's DP World now runs the marine terminal. These days, more than 30 per cent of Vancouver boxes are US-bound.
While Prince Rupert, with 60 per cent of its cargo destined for the US and 40 per cent Canada-bound, does well and is expected to do better this year, the big news comes from outside Vancouver at Deltaport, a 100-acre offshore plot of reclaimed land connected by a causeway bearing trucks and trains to shore and beyond.
It is a CAD300 million (US$223 million) project "privately funded" that will be completed by the end of the year. There has been a 33 per cent increase in rail capacity to 2.5 million TEU, with CN access to Chicago and eastern Canada.
To handle rising volumes Deltaport will be equipped with eight wide span cantilever rail-mounted gantry (CRMG) cranes to increase train loading speed as well as two "mega-max" ship-to-shore quay cranes, providing a total of six for the port, as well as six new rubber-tyred gantries (RTG).
The big story worldwide in the last year has been the growth of reefer, which Mr Ruest attributed to the growing affluence of much of the global population and new demand for goods once confined to the rich.
For example, Mr Ruest told of the increasing Asian demand for live Atlantic lobster from Canada's eastern Maritime provinces, and of the Atlantic seawater-filled containers with each lobster in its own slot for the entire coast-to-coast rail journey and then the whole sea voyage.
Less eye-catching but more important is the fall of trade barriers for Canadian produce, principally pork and beef, as the tensions over US trade policies mount with the election of US President Donald Trump.
Many tariffs have been eliminated resulting in a 114 per cent demand increase for pork by volume in the Chinese market in 2016, with China also paying US$580 million last year, up 157 per cent year on year. In Japan, tariffs have fallen to nine per cent on Canadian beef.
Now Canada's biggest railway, CN, which started as a collection of bankrupt railways in 1919, whose assets had fallen to the government, thereafter to be a loss maker for most of its life until 1995 when it was privatised. After that, CN expanded into the United States, purchasing Illinois Central Railroad and Wisconsin Central among others and enjoyed continuing growth since. |
