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Canadian National Railway Company T.CNR

Sector: Industrials | Sub-Sector: Railroads

Canadian National Railway Co is engaged in the rail and related transportation business. It transports goods for business sectors, ranging from resource products to manufactured products to consumer goods.
Canadian National Railway Company
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In-depth profile
Summary


Canadian National Railway Company (CN) is a Class 1 rail carrier which owns and operates a railway system serving Canada from one coast to the other, and serving mid-America from the Great Lakes to the Gulf of Mexico. Through its many connections, this system provides service to all points in North America.

CN's system underpins the North American economy by transporting natural resource products, manufactured products and consumer goods along its 20,600 route-miles of track. This system serves the ports of Vancouver and Prince Rupert on the west coast of Canada, the ports of Montreal and Halifax in eastern Canada, the ports of New Orleans and Mobile on the Gulf of Mexico coast, and the metropolitan areas of Toronto, Edmonton, Calgary and Winnipeg in Canada, and Chicago, Detroit, Memphis, Duluth (Minnesota) / Superior (Wisconsin) and Jackson (Mississippi) in the United States.

Services are delivered by a workforce of 24,000.

Safe and responsible railway operation is the cornerstone of CN's business.


Operations


Along its tracks the Company carries cargos such as chemicals and plastics, crude oil, refined petroleum products, iron ore, non-ferrous base metals and ores, frac sands, coal, coke, logs, lumber, wood panels, pulp, paper, wheat, oats, barley, feed grains, canola seed, canola oil, soybeans, consumer products, manufactured goods, finished motor vehicles and motor vehicle parts.

To carry these cargos the Company operates the largest fleet of rail equipment in Canada. From numerous box car configurations to gondolas and auto carriers, CN has equipment solutions to match its customers' needs.

CN has kept pace with locomotive technologies. In recent years it has upgraded its fleet with alternating-current locomotives for heavy-haul operations and locomotives with distributed power technology to improve train handling and fuel efficiency.

With its rail network as the foundation, CN has built an end-to-end logistics solution to provide customers with a high level of convenience, flexibility and efficiency.

CN partners with shortline railway companies in Canada and the United States to extend its rail shipping capabilities to areas not served by its tracks. Shortlines also provide their knowledge of local industries and interests.

Service extends to Mexico through CN's connection with Class 1 rail carrier Kansas City Southern Railway, which provides services to northeastern and central Mexico, and CN's connection with the U.S.-Mexico rail ferry vessels of CG Railway in Mobile, Alabama.

Through 80 strategically-located warehouse facilities in Canada and the United States, CN offers 1.3 million square feet of space. These facilities can handle shipments including forest products, grain and specialty agricultural commodities, dry or liquid bulk products, metals and minerals, and automotive products. An additional 850 acres of space exist across the Company's network to serve customers' distribution requirements.

Customers have the flexibility to ship via rail, truck and ship by virtue of CN's 23 intermodal terminals, located along the Company's rail network between the Pacific and Atlantic oceans and the Gulf of Mexico. Through these terminals, customers have access to over 75% of the U.S. market, and access to all markets in Canada.

In recent years, the Company has developed logistics parks in Calgary, Toronto, Montréal, Chicago and Memphis. These regional nodes bring rail, truck, warehousing and distribution services together in central locations.

Another innovation is CargoFlo, a network of 19 bulk distribution terminals and transfer and short-haul truck transportation services. Terminals are strategically located throughout CN's network in Canada and the United States. Through this network, shippers can move their bulk products quickly, safely and free of contamination.

In addition to land-based services, CN is a marine shipper. Its fleet of nine self-unloading carriers transport dry bulk commodities to ports on the Great Lakes and St. Lawrence Seaway system. CN also owns a multi-commodity rail ferry serving Baie Comeau and Sept-îles in Québec, and a large rail car barge which provides a critical link between Alaska and the rest of North America.

CN, working in partnership with ocean shipping companies, offers one-stop freight forwarding solutions for shipping products for import or export between North America and international destinations. In Canada, the United States and Mexico, CN offers customs brokerage services to customers, clearing their products through customs regardless of port of entry or carrier. In Asia, CN has offices or representatives in Shanghai, Beijing, Tianjin, Qingdao, Shenzhen and Hong Kong in China, Ho Chi Minh City in Vietnam, Taipei in Taiwan, and in Tokyo, Seoul and New Delhi.


Safety Culture


Railroading in Canada and the United States is governed by many safety regulations and adheres to many standards. These regulations and standards encompass railway infrastructure, railway equipment, train and engine operation, employee work and rest periods, and many other areas. Employees are immersed in CN's safety culture and follow safety rules to the letter. Every employee involved in the movement of trains is tested and trained in the operating rules set down by the Canadian and U.S. regulatory authorities. Safety and security training also extends to contractors working for CN.

Beyond government regulations are CN's own processes for ensuring safety throughout its operations. Starting from the base of the Company's safety policy, safety processes include safety briefings, safety audits, risk assessments and responses, supervisor safety walkabouts, and train riding by supervisors to observe safety practices. Safety processes also include the risk assessments individual employees make prior to commencing any work.

Safety and the use of technology are closely intertwined. Sophisticated rail flaw detection equipment is used to identify rails and track ties in need of replacement due to defects and wear. Trackside detectors are used to monitor heat levels in train wheel bearings and wheels to detect conditions and imperfections which could lead to bearing and wheel failures. Locomotive simulators, which replicate real train and track conditions, are used in training locomotive engineers. These are only a few examples.

In October, 2014 the CN opened its new employee training centre in Homewood, Illinois. The new centre offers courses for a range of jobs done at the Company and provides well-equipped learning laboratories and equipment for field training. Both newly-hired employees and existing employees receive training which is strongly oriented toward instilling the Company's safety culture. The opening of the Homewood facility closely followed the opening of a new training centre in Winnipeg, Manitoba, which is designed to accommodate up to 350 employees weekly for training.


Environmental Responsibility


CN launched the EcoConnexions Program in 2011 in partnership with Earth Day Canada as a focal point for the Company's commitment to environmentally responsible operations. This commitment includes pollution prevention, the reduction of greenhouse gas emissions, the conservation of natural resources and the protection of ecosystems.

The EcoConnexions Program sets targets for energy consumption, waste management and improvements in housekeeping practices at Company yards and offices. CN employees are also encouraged to adopt environmentally responsible approaches at work and to practice environmental stewardship.

In 2012, to further sustainability across its network, the Company initiated EcoConnexions - From the Ground Up, through which tree-planting projects are sponsored on municipal properties across Canada as the Company's contribution to a mass reforestation program. In 2014 trees were planted in 35 locations, principally in communities along CN routes, to bring to 400,000 trees the total number of trees planted since the beginning of the program.


History


Canadian National Railway Company was created by the Canadian federal government in 1919 as a Crown corporation to unite a number of predecessor railway companies, which carried both freight and passengers. These companies had been placed under government control after falling victim to overcapacity problems in the Canadian rail transportation sector during the First World War. Among them were Intercolonial Railway, built in the 1870's to link Nova Scotia and New Brunswick with Québec; Canadian Northern Railway, developed between the 1890's and 1915 with one continuous line stretching between Montréal and Vancouver and significant regional lines; and National Transcontinental Railway, constructed during the years 1905-1913 between Winnipeg and Moncton, New Brunswick.

Within two years, CN took over management of Grand Trunk Pacific Railway, which had been built during the period 1905-2014 to connect Winnipeg with the port of Prince Rupert on the west coast.

In 1923 CN acquired Grand Trunk Railway, thus completing the foundation for CN's rail network across Canada. Grand Trunk Railway had been a major railway in its own right. It had begun operating in 1853 and had expanded both through construction and through acquisition, including the acquisition of Champlain and St. Lawrence Railroad, which had commenced operations in Québec in 1836. It had created the Grand Trunk Western Railway Company at the end of the 19th century to hold its lines in Michigan, Illinois and Indiana and their Canadian connections at the St. Clair and Detroit rivers. Near the end of that century it had also acquired Central Vermont Railway, located in the states of Vermont, Massachussetts and Connecticut. CN became the owner of Central Vermont Railway and held it until 1995.

During the expansionary economic times of the 1920's, CN likewise expanded by diversifying into non-rail activities. One such business consisted of a large number of urban and resort hotels, some built by CN and others inherited from CN's predecessors. Another business was a network of radio stations established to provide entertainment and information to rail passengers. A third business was a fleet of five small ocean liners, which operated to the standards of the large luxury liners of the day.

CN's operations suffered from the severely depressed business conditions of the 1930's. Its circumstances changed dramatically following the start of the Second World War, when it made key contributions to the Canadian wartime economy.

During the war, CN introduced Centralized Traffic Control to the Maritimes. This system involved the use of centralized, electrically-lighted map panels which graphically displayed trains and track occupancies in areas of high rail traffic so that traffic control personnel could control switches and signals to regulate that traffic. By 1965 Centralized Traffic Control had been implemented in CN's operations across Canada.

1960 saw the introduction of the familiar CN logo of today. It was a striking departure from earlier logos, which had incorporated the words "Canadian National" within their designs.

CN's passenger operations, which had seen generally declining ridership from the time of the Second World War, were established in 1976 as a separate division which became known as Via. Two years later substantially all of the Company's passenger operations were transferred to a separate Crown corporation known as Via Rail Canada. CN's rail operations thereafter focused on freight, while the Company continued to hold various non-rail operations such as the Atlantic Canada ferry services of CN Marine.

In 1995 the Canadian federal government carried out the privatization of CN. After three-quarters of a century as a Crown corporation, CN became an exchange-traded, market-driven enterprise. The Company took its market-driven imperatives to heart, improving service reliability, expanding the scope of customer services and the use of technology while containing costs and focusing on its core rail business.

The acquisition of Illinois Central Corporation in 1999 transformed the Company into a North American railway. To CN's existing coast-to-coast rail network in Canada was added Illinois Central's network, which extended from the U.S. Midwest to the Gulf of Mexico.

In 2004 the Company acquired BC Rail from the British Columbia government. This acquisition gave CN the right to operate over BC Rail's publicly-owned rail bed in British Columbia and expanded CN's customer list, particularly in Western Canada's forestry sector.

CN acquired significant assets of the Elgin, Joliet and Eastern Railway Company in 2009. Though these assets included only 198 main lines mile of track, their location was critical, encircling the City of Chicago and thus enabling CN to streamline rail operations through that major transportation hub.


Address 935, rue de La Gauchetière ouest, Montréal, QC H3B 2M9 Canada
Phone 888-888-5909
Website www.cn.ca
Description Canada's largest railroad system, having approximately 20,100 route miles of track, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, and serves the ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth (Minnesota) / Superior (Wisconsin), Minneapolis / St. Paul, Memphis and Jackson (Mississippi), with connections to all points in North America. CN moves a diversified set of commodities and goods including petroleum and chemicals, metals and minerals, forest products, coal, grain and fertilizers, and motor vehicles, and also handles intermodal shipments.
Employees 23,430 (2012)
23,230 (2011)
Fiscal Year Dec 31
Assets $ 26,659,000,000 USD (2012)
$ 26,026,000,000 USD (2011)
Revenue $ 9,920,000,000 USD (2012)
$ 9,028,000,000 USD (2011)
Net Income $ 2,680,000,000 USD (2012)
$ 2,457,000,000 USD (2011)
Auditor KPMG LLP
Other Info

In July 2004 the Company acquired B.C. Rail Ltd. and its 1,500 miles of track in British Columbia.

Ownership Class Publicly-traded corporation
Stocks NYSE: CNI
TSX: CNR
NAICS
Line-Haul Railroads (482111)
Status Common shares listed on the Toronto Stock Exchange and the New York Stock Exchange.
Related Companies
Grand Trunk Corporation, Subsidiary
Grand Trunk Western Railroad Company, Subsidiary
Illinois Central Corporation, Subsidiary
Illinois Central Railroad Company, Subsidiary
Wisconsin Central Limited, Subsidiary
Wisconsin Central Transportation Corporation, Subsidiary
Research Links CNW Group
Board Members David G.A. McLean - Chairman
Michael R. Armellino - Boardmember
A. Charles Baillie - Boardmember
Hugh J. Bolton - Boardmember
Donald J. Carty - Boardmember
Gordon D. Giffin - Boardmember
Edith E. Holiday - Boardmember
V. Maureen Kempston Darkes - Boardmember
Denis Losier - Boardmember
Edward C. Lumley - Boardmember
Claude Mongeau - Boardmember
James E. O'Connor - Boardmember
Robert Pace - Boardmember
Executive Officers Claude Mongeau - President & CEO
Luc Jobin - Executive Vice President & CFO
Mike Cory - Senior Vice President, Western Region
Sameh Fahmy - Senior Vice President, Engineering, Mechanical & Supply Management
Jean-Jacques Ruest - Executive Vice President & Chief Marketing Officer
Sean Finn - Senior Vice President, Corporate Services & Chief Legal Officer
Jeff Liepelt - Senior Vice President, Eastern Region
Jim Vena - Senior Vice President, Southern Region
Russell J. Hiscock - President & CEO, CN Investment Division
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