Published on March 12, 2008
Rail’s Intermodal Services: An Innovative Business and a Public Policy Solution: Rail’s Intermodal Services: An Innovative Business and a Public Policy Solution Bill Rowat President & CEO Railway Association of Canada Intermodal Services: Intermodal Services Intermodal connectors tie the transportation system together to marry the best features of different modes Involves a greater use of existing rail capacity as an alternative to current congestion or costly expansion of highways Reduces shipping and travel costs Addresses public interest objectives for environment, fuel conservation, safety and land use Intermodal Characteristics: Intermodal Characteristics New roll-on/roll-off and piggy back systems Introduction of high-capacity, double-stack container cars and multi-level auto carriers Expansion of high-throughput intermodal terminals with sophisticated inventory control New information technology and e-customs clearance Slide4: Intermodal is the largest line of business Intermodal 16% Manufactured & Miscellaneous 2% Food Products 1% Paper Products 7% Minerals 14% Coal 11% Agriculture 13% Forest Products 11% Metals 4% Machinery & Auto 8% Fuels & Chemicals 13% Source: Railway Association of Canada, Railway Trends CN Intermodal: CN Intermodal Two product segments Domestic: consumer products and manufactured goods, operating through both retail and wholesale channels within Canada and U.S. Accounted for 58% of business unit’s revenues in 2001 International: handling import and export traffic through the ports of Vancouver, Montreal, Halifax, Mobile and New Orleans Accounted for 42% of business unit’s revenues in 2001 Slide6: 994 1,121 1,103 CN’s Network: CN’s Network CN is the only railroad offering coast-to-coast service across North America with 20 Intermodal terminals strategically located close to all major industrial centres in Canada, New England, and the mid-west U.S. Through partner railways we can provide service to Mexico. CN’s Intermodal Philosophy & Service Offerings: CN’s Intermodal Philosophy & Service Offerings ‘Need-for-speed’ trains – truck competitive One day transit time reduction between Toronto and Western Canada (4th a.m.) One day transit time reduction between Chicago and Vancouver (4th a.m.) CN’s Service Offerings: CN’s Service Offerings Service agreements – truck competitive CN-CSXI offers Vancouver to New York in five days CN-UP service for shipments between Central Canada, Michigan, Texas and Mexico City (i.e. 3rd a.m. Houston) CN’s Terminal Expansion: CN’s Terminal Expansion Edmonton Intermodal Terminal Opened October 2001 $23 million facility on 370 acres Can handle 150,000 containers and trailers yearly, with room to expand to 225,000 containers Taschereau (Montreal) Scheduled opening Fall 2002 Part of $47 million terminal consolidation Will allow 30% more Intermodal traffic at Montreal hub CPR Network -North America: CPR Network - North America Slide14: CPR's COMPETITIVE ADVANTAGE A network of 23 intermodal terminals, with recent capacity expansions in strategic locations - Vancouver, Calgary, Chicago, Toronto, and Montreal. The only carrier that can move non-reinforced trailers by rail. The leading provider of rail service to overseas container shipping lines calling at Vancouver and Montreal. Daily service from Montreal to all major CPR inland points in Canada and the U.S. The only railway offering direct service from the Port of Vancouver to Chicago over its own track. Value-added shipment management through Integrated Supply Services. Slide16: Expressway is an innovative intermodal transportation system, designed for the short-haul market. Expressway operates dedicated trains between dedicated terminals. Expressway railcars combine high-ride quality with flexible loading (using a drive-on drive-off ramp system) to safely handle standard non-reinforced highway trailers. Expressway is backed by an award winning computer system which provides easy to use automated reservations and terminal check-in to keep truck turnaround times to a minimum. Each corridor has four train starts a day, two in each direction, six days a week. Each train has the capacity for sixty 53ft trailers. (240 trailers a day) Slide17: Intermodal Success Stories Canadian Tire began building its western distribution centre next to Calgary Terminal. Consolidated Fastfrate, one of the largest freight forwarders in Canada, opened a cross-dock facility next to Toronto terminal in 2000. Hudson's Bay Company and Canadian Pacific Railway (CPR) announced a new partnership for shipping 16,000 truck trailers a year by rail, to reduce traffic congestion and greenhouse gas emissions on Highway 401. Retail giant Sears opened eastern and western distribution anchors next to Toronto and Calgary terminals in 2000. Daimlerchrysler Canada signed an agreement with CPR that will reduce the number of trucks by 120 per day on the 401, which equates to 48,000 kilometers per day of reduced highway usage Success Stories cont’d: Success Stories cont’d CN Navigator: GPS technology tracks truck movements and instantly gives location of all pick-ups and deliveries Speed Gate: Allows truck drivers quicker access to terminals through automated self-serve gate stands eBusiness: Intermodal Direct provides online ordering of equipment, shipment tracking, invoicing and payment Conclusion: Conclusion Public officials can assist the intermodal business model to thrive by: Providing tax incentives to shippers and trucking companies that use intermodal Levelling the tax, regulatory and infrastructure imbalance that characterizes the treatment of surface modes Intermodal can help meet Canada’s trade growth imperatives and its environmental goals.