Rail-Port Capacity
Field on Wheels Conference
October 21, 2016 | Winnipeg MB
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Who We Are
2015 HIGHLIGHTS
$250B
$6B
20%
300M
in goods handled
on CN’s network
in goods and
services purchased
of Canada’s exports
hauled by CN
tons of cargo
moved by CN
450+ trains starts and
15,000 shipments moving each day
1,300 active high HP locomotives and
120,000 active cars on line on any given day
6 major port connections
10 main yards
17 automotive compounds
21 intermodal terminals
58 transload centres
200 interchange locations
23,000 employees
C$12.6 billion in revenue
58.2% operating ratio
C$2.7 billion in capital investments
19,600 route miles
C$60 billion market capitalization
5.5 million carloads
A Backbone of the economy & true supply chain
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Our Franchise
 Unique three-coast access
Global West 24%
Prince Rupert
 Originating carrier for ~85% of traffic
Edmonton
 Close to 70% of traffic originating and terminating
on CN Network
Vancouver
Calgary
Global East 4%
Domestic Canada 18%
Saskatoon
Montreal
Winnipeg
End Market Diversity
Halifax
Transborder 35%
24% Intermodal
18% Petroleum & Chemicals
17% Grain & Fertilizers
16% Forest Products
10% Metals & Minerals
7% Automotive
3% Coal
5% Other Revenues
Detroit
Toronto
Chicago
Domestic U.S. 17%
Memphis
Global South 2%
Jackson
Mobile
New Orleans
Based on H1 2016 Revenues
Unparalleled reach coupled with geographic and
product diversity
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Grain Video
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2016-17 Grain Crop
Expecting a near record crop
 With a wide range of quality that will add complexity to the supply chain
Harvesting got off to a slow start, weather continues hamper
 Farmer deliveries to country elevators were behind first 7 weeks
 SK/AB wet and cold + west coast storms impacting more recent weeks
CN is well prepared
 Weekly sustainable carloads for CN: 5,500 during fall, 4,000 during winter
 Orders have come in above 6,000 as customers try to catch up
 All hopper cars are out of storage and in service, also repaired over 700
government hopper cars
 Called back crews in Western Canada; locomotives are available; significant
capital investments in the supply chain - - including the CN network and grain
terminals
 Majority of CN’s grain shipments will move under commercial terms for 2016-17
crop, with reciprocal penalties for car supply and car usage
Readyto
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this year’s
crop, over
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CN’s Weekly Grain Report
Weekly supply chain monitor
 Reports a number of key supply chain
metrics:
 Total authorized orders
 Cancelled orders
 Contracted and spot orders
 Weekly spotting plan
 All compared to maximum sustainable
supply chain capacity
Open and
fact-based
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Nearly 800,000 carloads in 2015
(multi platforms - each platform counted as one car)
2%
CN operations cover over 25
terminals in Vancouver
10%
Coal
Grain & Fertilizer
39%
35%
Petro Chemicals
Forest Products
Intermodal
10% 5%
Autos & Others
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Vancouver
capacity
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 CP performs switching on South Shore
(Coproduction)
 Three grain terminals
 Two Container Terminals
Centerm (major expansion planned)
Vanterm
Centerm
Alliance Grain Terminal
Vanterm
West Coast Reduction
Pacific Elevators
Vancouver
South
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Kinder Morgan
Fibreco
Richardson
Cargill Terminal
Lynn Terminals
East & West Gate
 CN performs switching on North Shore
 Five major terminals within 2 miles
 Limited rail space
 CN-CP Co-production “direct hits”
improve fluidity
 24/7 operations critical to increase
fluidity, reliability and capacity
Neptune Terminal
CN
North
Shore
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Two bridges and one tunnel govern
CN’s corridor capacity and North
Shore access
CN Second
Narrows Bridge
CN Thornton
Tunnel
6 at-grade crossings
across rail corridor
North Shore
 Terminals investing in
expansion
 Significant volume
increment anticipated by
2020, particularly in
grain
Fraser River Bridge
(owned by Public Works Canada)
CN/CP Sapperton
Interchange
CN Thornton
Yard
Daily train count forecasted to exceed current
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corridor capacity by up to 50%
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North Shore Corridor Capacity
Proposed G3
Terminal Location
3 limiting factors
1. Tunnel venting: 20+ mins/train
 Additional capital to reduce vent time
 Target 5 minutes venting
Second Narrows Bridge:
marine traffic has priority,
bridge up avg 5-6 hours/day
2. Running time Willingdon to North
Shore: 20 mins+ /train
 Limited by track speed, North Shore yard
limits
 Train staging locations
3. Average 13 daily bridge lifts: 5-6
hrs/day
 Marine traffic priority over rail traffic
 Potential future increase in deep sea traffic
to Kinder Morgan, Pacific Coast Terminal
11,000’ Thornton Tunnel:
requires 20 mins+ to vent
following every train
North Shore supply chain
will require investment to
remain fluid into the future
Regulated interswitch deliveries represents over half
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of North Shore-bound traffic
Regulatory influences on capacity
 Regulated Interswitching
 Regulated rate for delivery in Vancouver hampers much needed infrastructure investment
 Revenue Cap Legislation
 Discourages investment in railcar assets and rail infrastructure, including surge capacity for
seasonal demand and record crops
 Discourages containerized grain, impeding growth of pulse crops and creation of surge capacity for
all grains
 Brings capital budgeting uncertainty
 Bill C-30
 Extended interswitching adds inefficiencies through additional hand-offs and diminishes overall
capacity, exacerbating looming hopper car issue
 Loss of traffic to U.S. carriers without reciprocity could ultimately lead to reduced network
investment and diminishing capacity in Canadian rail networks
 Weekly quotas single out one component of the supply chain and do not recognize the
interconnectedness of the entire supply chain
Need policies that enable the innovation and
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investment required to keep Canada competitive
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