RP1 • an information feature t h e g l o b e a n d m a i l • f r i day, n ov e m b e r 3 0 , 2 0 1 2 Special RAIL POWER A driving force in the economy, Canada’s railway sector pushing new ways to deliver the goods ISTOCKPHOTO.COM ribbon of steel runs through Canada’s narrative: close to 50,000 kilometres of national, regional and local railroad tracks that span the country from the Atlantic to the Pacific. As they move millions of people and billions of tonne-kilometres of freight each year, Canada’s railways – one of the world’s largest rail networks – drive economic growth and strengthen communities. Leaders in Canada’s rail industry are now calling on government and industry stakeholders to work together and help the rail sector continue its successful track record. “Railways built Canada,” says Dr. Barry Prentice, a former director of the Transport Institute who is now professor of supply chain management at the University of Manitoba’s I. H. Asper School of Business. “Roads and communities in Canada were built because railway tracks were there. Canada’s railways are a critical part of our history and our economy.” Today, Canada’s rail industry boasts billions in annual revenue and employs more than 32,000 people. Total freight revenues from 2011 reached almost $10.3 billion, a 7.7 per cent increase over 2010, according to the Railway Association of Canada, an Ottawa-based organization that represents more than 50 goods, tourist, commuter and intercity rail businesses in Canada. At Canadian National Railway Company (CN), which operates Canada’s largest rail network and owns approximately 33,152 route-kilometres of track in North America, revenues for the first nine months of 2012 were up 11 per cent from the same period “For an industry that’s often seen as very inflexible – you just can’t pick up and move your rails – the Canadian rail industry has been remarkably flexible and agile.” Dr. Barry Prentice is a professor of supply chain management at the University of Manitoba’s I. H. Asper School of Business last year. Railway Association of Canada (RAC) president and CEO Michael Bourque says rail in Canada is growing in a multitude of areas and enjoys strong public support “at all levels. Canadians want more rail.” Mr. Bourque says strong demand for freight services is due in large part to Canadian exports of goods and commodities produced by the mining, agriculture, forestry, potash and energy industries. These and other industries that ship large volumes of heavy freight benefit from Canadian rail freight rates, which are among the lowest in the world, according to the RAC. The global move to “containerization” – freight transport that uses large, stackable containers that can be ported by train, ship and truck – is another factor in Canadian rail’s growth, says Dr. Prentice. Canadian rail companies are also increasingly moving crude oil in tank cars. Unlike pipelines that need a long leadtime to build, railways have the ready capacity to move oil in containers. “For an industry that’s often seen as very inflexible – you just can’t pick up and move your rails – the Canadian rail industry has been remarkably flexible and agile,” he says. Last year, according to the North American Transportation Statistics Database, almost $103 billion worth of international merchandise – about $11 billion more than the previous year – travelled by Canadian rail, with exported goods accounting for more than $68 billion. CN alone moves about $85 billion worth of goods each year to global markets. Canadians goods slated for export to the U.S. and offshore markets account for about 30 per cent of CN’s carloads. “That means CN is a major player in Canada’s trade and prosperity, and that global trade is very important to CN’s business as well,” says Mark Hallman, CN’s director of communications and public affairs. The country’s rail operators continue to up their game. Last year, to meet rising demand for rail, Canada’s two largest rail companies, CN and Canadian Pacific, spent a total of more than $2.7 billion on infrastructure and system improvements. This year, CN is spending $1.8 billion to maintain and further upgrade its North American railway network and support various growth and productivity initiatives. But these investments aren’t all that’s needed to ensure Canada’s rail industry continues to thrive and create value for the industries that drive the country’s economy. Government and industry stakeholders must also work together to ensure a balanced, commercial approach to rail service, says Mr. Hallman. “Additional regulation being demanded by some shippers would stifle innovation and chill the positive momentum we’ve developed,” says Mr. Hallman. “If the government were to legislate in the area of railwaycustomer service agreements, we believe any new rules should be balanced and targeted. CN believes such legislation should require mediation as a first step to give commercial solutions a better chance to prevail.” PROGRESS Innovation propelling commuter and freight services emand is rising for innovative rail technologies as cities seek to make metropolitan areas more livable and productive, and freight operators strive for further efficiency gains. Finding ways of enabling urban transit systems to move more people “has benefits for both the environment and reducing gridlock,” notes Michael MacKenzie, vice president and managing director of Toronto-based Thales Canada, Transportation Solutions, which produces systems to enhance urban railway network performance. Thales Canada invented today’s modern, automated train control technology (known as Communi- cations-Based Train Control) over 25 years ago and its products can be found on urban rail systems in more than 30 cities around the world. “This ‘brains for trains’ technology increases system efficiency by 30 to 40 per cent, significantly reduces operating costs and can be installed on existing systems and on new builds,” says The world is complex. Your decisions don’t have to be. Online? Transport safety Seamless journeys Operational efficiency Passenger satisfaction Revenue protection Network capacity To find out more about our Transportation solutions, scan the QR code or visit thalesgroup.com/canada www.railcan.ca Read more about Canada’s rail industry at: Mr. MacKenzie. Beyond a goal of improving operational efficiencies and customer service, transit operators are also adopting innovative technologies as a means of helping to reduce operating costs. Technological innovations have also enabled improved rail transport safety and operational reliability. An example is Canadian Pacific’s (CP) Predictive Technology. It uses data from a trackside monitor that analyzes passing freight trains for any possible mechanical troubles. “This allows maintenance staff to proactively correct problems before they present a potential safety issue or impact a customer shipment,” said CP spokesperson Ed Greenberg, who notes CP’s proprietary train and track surveillance systems incorporate advanced digital imaging, GPS tracking and cutting-edge sensors “to quickly identify infrastructure issues and conduct maintenance – lifting fleet efficiency and community safety to new levels.” In the transit sector, Thales reports that systems that keep trains flowing smoothly and safely at closer intervals in order to facilitate more passenger flow – are in hot demand. Similarly, transit operators are increasingly introducing systems that automatically collect fares and provide passengers with up-to-the-minute arrival and departure information. For example, passengers using Agence metropolitaine de transport (AMT) service in Montreal can now use their smartphones to check the ar- ENVIRONMENT Efforts advance green rail agenda Train transport is more than an efficient way to get heavy loads from points A to B; it’s also the greener way to go. “Railroads are the most environmentally sound way to move freight over land,” says Mark Hallman, communications and public affairs director at Canadian National Railway Company. “On average, trains are four times more fuel efficient than trucks. They also reduce highway gridlock, lower greenhouse gas emissions and reduce pollution.” According to the Railway Association of Canada, an average freight train can move the same tonnage of freight as 280 big trucks. Canada’s railways have become increasingly energy efficient over the years, thanks to innovations such as low-idle and automatic stop and start systems, and rail lubrication technology that reduces friction, noise, wear and energy use. Today, it takes just one litre of diesel fuel to transport a tonne of freight 169 kilometres by train. Green initiatives are yielding results at CN. Through its power motive acquisition program, the company is buying new, more fuelefficient locomotives while retiring older units and moving less fuel-efficient mainline units into less demanding operations. CN today consumes close to 15 per cent less fuel per gross-tonne-mile than the industry average, says Mr. Hallman. CN’s quest for improvement led the company to recently retrofit two diesel engine locomotives to use 90 per cent natural gas, with 10 per cent diesel fuel for ignition. CN is testing them on a 480-kilometre run north of Edmonton to Fort McMurray. If the technology proves viable, locomotives using natural gas – which has a lower carbon content than diesel – would produce significantly fewer carbon dioxide emissions. rival times of inbound trains. AMT also uses electronic display boards at stations to keep passengers informed. While Thales currently offers a suite of fully integrated control solutions that enable operators to centrally monitor various aspects of their system including security and fire and smoke detection on trains and in stations, a new generation of urban rail advanced train controls is already in development. Mr. MacKenzie says these controls will provide transit operators even greater functionality and oversight of their systems from central locations. Mr. MacKenzie says that Thales is proud to provide solutions for Canadian rail transit operations in Toronto, Montreal, Vancouver and Edmonton, and is currently working to ensure its technology is part of the solution for new projects planned for the Greater Toronto Area, Calgary, Kitchener-Waterloo and Ottawa. This report was produced by RandallAnthony Communications Inc. (www.randallanthony.com) in conjunction with the advertising department of The Globe and Mail. Richard Deacon, National Business Development Manager, [email protected]. an information feature • RP2 t h e g lo b e a n d m a i l • f r i day, n ov e m b e r 3 0 , 2 0 1 2 RAIL POWER POLL HIGHLIGHTS According to the recent poll, the railway sector continues to garner positive impressions from the Canadian public, especially with regards to safety and societal/ environmental impacts. Here are some of the highlights: • Railway transportation, including freight and personal transportation, is by far seen as the safest, most environmentally friendly and best means of transportation for society overall compared to trucks, buses, cars and planes. • Nearly three-quarters (72%) would recommend jobs in the railway sector to their friends or family members. • Rail transportation is seen as the most environmentally friendly (84%), safest (83%), best for society overall (74%) and most reliable (65%) means of transportation by Canadians. OPINION Canadians see rail as best way to meet the nation’s growing transportation needs By Michael Bourque President and CEO, Railway Association of Canada “As the backbone of a highly-integrated logistics network, Canadian railways have been instrumental in solidifying this economic status.” national survey conducted by Léger Marketing for the Railway Association of Canada (RAC) shows Canadians have overwhelmingly positive perceptions towards rail. They envision rail as a growing component of the nation’s future transportation system and embrace an increased presence of rail in the • The railway sector is seen by most Canadians as being important to the national (93%), provincial (91%) and local (80%) economies. • Rail transportation is also clearly seen as a potential solution to congestion problems on Canadian highways and in cities, as well as a good way to reduce the number of accidents on Canadian roads. The Railway Association of Canada online poll was conducted by Léger Marketing in every province of Canada with a representative sample of 2,508 Canadians between March 21st and March 27th, 2012. Margin of error of +/- 2%, 19 times out of 20. The success of GO Transit in Toronto, West Coast Express in Vancouver and Agence métropolitaine de transport in Montreal all point to continued growth of commuter services. ISTOCKPHOTO.COM economy and in their commuter habits. Rail transportation provides one of the nation’s best return-oninvestment options for creating a less-congested, environmentally friendly, national logistics network. The consensus that Canada should continue to develop as a rail nation reflects a common sense approach to sustainable growth, one that benefits commuters, the economy and the environment simultaneously. Rail transports the economy Canada’s economy is reliant on a robust combination of transportation modes, which together play a critical role in ranking Canada among the world’s 10 largest economies with a GDP over $1.7 trillion. Canadians’ take on the rail sector reflects this dependence, with 93 per cent viewing freight and passenger rail transportation as important to the national economy. Despite financial uncertainty in key markets across the globe in recent years, Canada’s vast resource exports have helped the country maintain a healthy, export-rich economy. As the backbone of a highly integrated logistics network, Canadian railways have been instrumental in solidifying this economic status. Railways have leveraged trade agreements and their outstanding relationships with regulatory systems to collaborate with partners and maintain a high level of functionality. We have effectively and efficiently worked with our partners – ports, terminals, shipping companies and the trucking industry – to get products to external markets. Together, our job as the transporters of goods is to enable the competitiveness of our customers. By allowing customers to ship products in a timely way to very specific markets, we are enabling them to add value, raise prices and create more wealth in Canada. We’re at a point in history where a new supply chain and the infrastructure around it should really be Canada’s focus going into the future. Rail transportation and government Our public opinion polling also shows near-unanimous support from Canadians for more investment in passenger rail. The federal government has played an active role in supporting the growth of rail in Canada including allocating major capital upgrades to VIA Rail for intercity travel in recent years. Though Canada’s rail system is maintained and developed predominantly through annual investments of more than $1.7 billion from the sector itself, a great majority of Canadians (87%) think the government should provide funding for rail. Whether for commuter rail or intercity rail travel, there’s a lot of support for passenger rail. The success of companies like GO Transit in Toronto, West Coast Express in Vancouver and Agence métropolitaine de transport in Montreal all point to continued growth. When those organizations put a new railcar on their tracks, they are doing their part to reduce highway congestion, help the environment and lower government costs for highway infrastructure. Canada’s rail sector has upheld its commitment to growth, safety and sustainability. The rail business is the story of Canada: our country was built on a railway, not a rebellion. The Railway Association of Canada and its members are primed to embrace the sector’s position as a key player in Canada’s future economic success. Together We deliver the goods A true backbone of the economy www.cn.ca
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