The continuing surge of Asian trade with North America will help propel double-digit growth in intermodal revenues over the next five years for Canadian National Railway, according to Andrew Fuller, CN director-product, sales and marketing.
The railway has responded to the demands of the past few years through a variety of initiatives, including an extensive re-engineering of its intermodal product, significant improvements to capacity and services, targeted investments of C$650 million (US$585 million) as well as reductions of asset and terminal costs, Fuller told the 48th AGM and Annual Conference of the Association of Canadian Port Authorities.
Fuller said that growth over the next five years will be driven by increased 'velocity' of freight services, the further development of US gateways, new port expansions such as Prince Rupert, British Columbia and Mobile, Alabama.
He stressed that an integrated approach was also critical, involving many transportation industry partners and including such features as joint rail/shipping line and exporter sales calls.
The railway's enhanced performance, he recalled, goes back to the creation in 2003 of IMX (Intermodal Excellence), which broadened CN's existing, successful scheduled railroading practices in the carload business to intermodal ' the transport of containers and truck trailers by rail.
'With low margins, we did not cover the costs of capital, and we needed the best plan to offer the most capacity for customers,' Fuller said, adding, 'so we came up with a new business model (IMX) involving a complete overhaul of intermodal.'
Last year, CN Intermodal posted C$1.27bn (US$1.14bn) in sales, representing one fifth of total freight revenues. In first quarter 2006, CN's intermodal revcnues rose by 12%.
