It should come as no surprise that Canadian National Railway Co.’s vice president of intermodal services, Keith Reardon, anticipates that the trend of escalating volumes of intermodal rail cargo will continue for the foreseeable future. Reardon, who started with CN in 1998 and has been in his current position since May 2012, is expected to be one of a host of speakers delivering such a message at the Intermodal Association of North America’s Intermodal EXPO 2014, set for Sept. 21-23 at the Long Beach Convention Center in Southern California. Citing a number of limitations on North American trucking capacity, as well as the increasing ability to furnish “truck-like” service in an environmentally friendly manner utilizing the rails, Reardon shares his insights on intermodal growth, including CN’s distinctive capabilities, in an exclusive interview with the American Journal of Transportation.
Canadian National Railway Co.’s Keith Reardon is understandably bullish on intermodal rail volumes.
Canadian National Railway Co.’s Keith Reardon is understandably bullish on intermodal rail volumes.
Do you see, as industry projections indicate, continued growth in the intermodal rail sector in North America, and, if so, why? Yes, we do see continued growth. There are a lot of different factors impacting the segment, but at the fore are the [limited] trucking capacity, the driver shortages, the fact that the new-tier emissions truck requirements are much more expensive and are probably taking some people out of the marketplace, and the ultimate customers – the people making the buy decisions – are trying to target to reduce their carbon footprint with the vendors that they use. So all those factors together really are encouraging our customer base to try to use intermodal, and I think that’s why we’ve seen the growth, and I think that’s why we will also see the continued growth moving forward. How is CN meeting the challenges of providing reliable, timely, cost-efficient intermodal service? At CN, we established our “precision railroading” model of scheduled service many years ago. We continue to run our network based on those principles. We have layered on an enhanced approach that couples our service excellence and our operational excellence together. We are working closely with all aspects of the supply chain, looking end to end. We are collaborating with all of those partners in the supply chain. We are innovating with all of our customers to try to produce products for them in the marketplace that enhance their ability to grow and to enter markets that maybe they have not been able to in the past. So all of those factors together allow us to provide that cost-effective and reliable and on-time service. As we grow our business, we are constantly looking at our network and where we need to invest in our network so that we can continue to have a fluid, reliable service. We are also constantly looking at our intermodal terminals and the capacities there and adding capacity, improving the throughput of those terminals with capital investments as we see growth coming. We do a lot of upfront planning to accommodate that growth and allow us to provide that cost-effective and reliable, timely service. In particular, how does CN fulfill the needs of shippers seeking “truck-like” service at lower cost and with less environmental impact? One thing that people may not know is that we actually have a retail, or a door-to-door, business. We have over 1,000 owner-operators and over 8,500 containers in our fleet. So we have a pretty good understanding of what a truck-like service needs to be, because we have one. We engage with our customers on a door-to-door product and provide a truck-like service. And then you couple that with our intermodal network, as we are able to provide that larger part of the trip on a more environmentally friendly and efficient or less costly basis, because we take the rail portion and then we add the truck-like feel at the beginning and the end of the shipment through our CNTL [CN Transportation Ltd.] business. We have an extensive customer service organization that helps us in our relationship with our customers to provide that truck-like service at low cost and less environmental impact. They’re very focused on the customer and on producing that truck-like product for them. We also are a very metric-minded organization. We manage our business through performance measurements, and we focus on that on an hour-to-hour basis, and that’s how we’re able to provide that high level of customer service and efficient, reliable service. In addition to having your own fleet, what role do CN’s relationships with trucking firms, such as J.B. Hunt and Schneider, play in terms of such capabilities? We have excellent relationships with many truckers, both in Canada and in the U.S. Our wholesale business is what we call the relationships with our truckers, and that business represents about 50 percent of our domestic volume. How does CN benefit from the unique geographic positioning of its T-shaped system, reaching the Atlantic, Pacific and, after the 1998 acquisition of Illinois Central, Gulf coasts? We do have a very unique and probably one of the best network structures in North America, including the ability to touch on all three coasts and our geographic benefit with very low grades through the Rockies, which reduces our carbon footprint as we move goods from the West Coast to the East and back. On the West Coast, we have the fastest ocean transit times from Asia into North America, helping us very much on the West Coast. We also have the same type of advantage in the East with our Halifax service, as for the carriers coming from Europe into North America, the first port of call as they pass down to the coast is Halifax. Again, we have a fast transit time there. We have export capabilities from two countries. We have the U.S. and Canada, and we can export through three separate coasts – the Gulf Coast, Atlantic Coast and the West Coast. So there are a lot of advantages to CN’s T formation. Seeing you hold your bachelor’s degree in marketing plus your master of business administration from the University of North Florida yet you’re based now in Toronto, do you ever find yourself missing Jacksonville, Fla., like in the wintertime? Well, I spent a lot of my adult life living in Florida, and it’s a very nice place to visit for me now. But I like Canada, I like Chicago, I like the North. And I’ve got three young kids who are into hockey, figure skating and a lot of winter sports. Although I may miss the sunshine, I really don’t miss it too much. Aside from shuttling your kids to and from the rink, what outside interests keep you occupied when you’re not busy working? Those are pretty much my interests outside of this job. I’ve got three young kids – ages 7, 9 and 11 – and they have a passion for various sports. My son is a goalie in hockey, and my two daughters are gymnasts and figure skaters. So, on the weekends or whenever I do have a free moment, I like to spend all my time with them.