MONTREAL,
March 7, 2014 /CNW Telbec/ - CN (TSX:
CNR) (NYSE: CNI) responded today to the Order in Council announced
earlier by Transport Minister Lisa
Raitt and Agriculture Minister Gerry
Ritz that sets out minimum volumes of grain the
railways are each required to move.
"CN will do its part to meet the challenge of
moving this 100-year record grain crop," said Claude Mongeau, CN
president and chief executive officer. "Our assessment
shows that an upper limit of around 5,500 cars per week may be
achievable, but only if all members of the supply chain work
together closely. This is broadly in line with what was mandated by
the government in today's Order in Council. But we all have
to recognize that the challenge we jointly face is unprecedented,
and it will require a new level of collaboration to succeed."
Last year's prairie grain crop was by far the
biggest in Canadian history. As a result, CN has to move 10
million more tonnes of export grain, or 50 percent more than for
any other crop. To put this in perspective, 10 million tonnes is
equivalent to twice the amount of export potash CN handles, 25
percent more than the total amount of lumber it moves to export,
and almost as much coal as it moves to export in a year.
"No supply chain in the world can reasonably be
expected to handle a 10 million tonne increase in traffic on such
short notice. It takes eight months to on-board and train a
crew member, and seven to eight months to acquire cars and
locomotives," said Mongeau.
The exceptional challenge of moving this year's
record grain crop was made more difficult by the extreme winter
conditions CN experienced across much of its network this
year. "Our Western Canada employees have spent the last three
months working day and night in the most frigid temperatures we've
seen across the prairies in at least the last 50 years.
Despite the best efforts and personal sacrifices of our employees,
we have not been able to keep up with a normal winter grain flow
during this polar vortex," said Mongeau.
The difficult weather conditions added to the
pressure, and caused a shortfall of around 10,000 carloads (around
one million tonnes) compared to a normal winter grain flow.
Given this 100-year grain crop, CN would still have a large backlog
of grain to move even if it performed at the best level achieved in
its history. Indeed, even after a very slow start in August, when
grain elevators decided to ship at least 10,000 carloads less than
the available rail capacity, CN has moved approximately 10.5
million tonnes of grain out of prairie Canada so far this crop year. This
throughput is on par with the average to-date performance over the
last five crop years. CN's grain performance to date
benefited from record spotting performance from September to
November, until extreme cold weather hit much of North America in December.
CN has indicated to the federal government its
intention to ramp up towards 5,500 cars delivered to country
elevators each week, as soon as weather conditions permit and a
strong Thunder Bay program
starts. CN will have the resources - locomotives, cars and
crews - in place to support this record weekly spotting
level. This level of performance can be sustained, provided
that there is strong collaboration from all partners in the supply
chain - grain companies, country and terminal elevators.
Critical factors will include: use of all sale corridors;
timely loading and unloading of grain cars; and encouragement from
the federal government to act in a collaborative, as opposed to
accusative, manner in the grain supply chain.
"Hard work, joint objectives and a true spirit
of collaboration will be essential to the industry being able to
meet the very aggressive targets that have been set today by the
federal government," said Mongeau.
CN believes that the Minister of Agriculture's
call to introduce more regulation for grain transportation is both
ill-advised and seriously counter-productive. "More
regulation would lead to adversarial relationships within the
supply chain, at a time when collaboration is essential," said
Mongeau. "Sound policy calls for exactly the opposite: a more
collaborative and commercial framework is what Canada needs to support a world-class grain
growing sector."
CN is a true backbone of the economy,
transporting approximately C$250
billion worth of goods annually for a wide range of business
sectors, ranging from resource products to manufactured products to
consumer goods, across a rail network spanning Canada and mid-America. CN - Canadian National
Railway Company, along with its operating railway subsidiaries --
serves the cities and ports of Vancouver, Prince
Rupert, B.C., Montreal,
Halifax, New Orleans, and Mobile, Ala., and the metropolitan areas of
Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth,
Minn./Superior, Wis., and
Jackson, Miss., with connections
to all points in North America.
For more information on CN, visit the company's website at
www.cn.ca.
SOURCE CN