Canadian National Railway

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Canadian National Railway Co.

logo
legal form Public Company (Canada)
ISIN CA1363751027
founding December 20, 1918
Seat Montreal , Canada
management Robert Pace (Chairman of the Supervisory Board)
Jean-Jacques Ruest (President and CEO)
Number of employees 23,172
sales 12.6 billion CAD
9.02 billion EUR
Branch Transport , logistics
Website www.cn.ca
As of December 31, 2015

The Canadian National Railway (CN), also known as Canadian National Railway (1918-1960) and Canadian National / Canadien National designated (CN) (since 1960), is one of two Canadian Class 1 - railway companies (in addition to the Canadian Pacific Railway ) . The company is owned by the Canadian National Railway Company listed on the Toronto Stock Exchange on the S & P / TSX 60 financial index. The company is the largest Canadian rail company in terms of both route network size (approximately 32,180 kilometers) and revenue, and is the only Canadian company to operate a network from Nova Scotia to British Columbia . Through its subsidiary in the USA , the Grand Trunk Corporation , it has a route network there that extends along the Mississippi River from the Great Lakes to the Gulf of Mexico . The company is based in Montreal .

Canadian National Railway route network

Route network

The route network extends from Halifax (Nova Scotia) via Montreal, Toronto , Winnipeg , Edmonton to Vancouver and Prince Rupert on the Pacific. To the south it extends over Buffalo , Detroit , Chicago and St. Louis to New Orleans and Mobile and to the west to Sioux City and Omaha .

history

Beginnings

First Canadian National Railways logo
Old CN logo on a steam locomotive

The government of Canada founded the Canadian National Railways (CNR) on December 20, 1918. They wanted to avoid fears that the bankruptcy of several railway companies would break down transport connections in Canada.

On September 20, 1918, the government had already acquired a majority in the bankrupt Canadian Northern Railway and installed a new management. At this time, the company already controlled the Canadian Government Railways (CGR), a system consisting of the Intercolonial Railway , the National Transcontinental Railway , the Prince Edward Island Railway and other former companies. The government hoped to simplify the operation of the various railways.

On July 12, 1920, she took over the Grand Trunk Pacific Railway , as their parent company Grand Trunk Railway was unable to operate the route economically. Eventually, the bankrupt Grand Trunk Railroad was placed under state control on May 21, 1920. Since the management and the shareholders refused to nationalize, the merger could only be completed on January 30, 1923. In the years that followed, some smaller railroads were added (such as the Montreal and Southern Counties Railway in 1923 ), partly because of their bankruptcy or because of political necessities. However, the basic network of the Canadian National already existed at this point.

In the following period there were repeated criticism of the support of the CNR as Crown Corporation by the Canadian government. In particular, the rival company Canadian Pacific Railway complained that it supported the competitor with its taxes. However, the CPR received government support in the form of land and mining rights. It also had a monopoly in certain areas of Canada in the early years. In contrast to the Canadian Pacific, the Canadian National opened up the remote and undeveloped regions of western Canada , northern Ontario and Québec as well as the economically weak Maritimes .

The government of Canada used the society for its further politics. So the company got control of the ferries in the Atlantic and the operation of the narrow-gauge Newfoundland Railway . They also exercised control over the joint operation of the Northern Alberta Railway with the CPR. In 1932, the government founded the Canadian Radio Broadcasting Commission to enable train passengers to receive radio reception during the entire journey . This she converted in 1936 as the Canadian Broadcasting Corporation into an independent Crown Corporation .

In 1980 the CNR acquired the Detroit, Toledo and Ironton Railroad (DT&I) and in 1981 the Detroit and Toledo Shore Line Railroad , which they subordinated to the Grand Trunk Corporation . She later resold parts of DT&I; today they are part of the Indiana & Ohio Railway . In 1995 RailAmerica bought the Central Vermont Railway and now operates it under the name New England Central Railroad .

State influence and recapitalization

In Harvey Canada

Until the 1980s, the Canadian National Railway ended most of its fiscal years at a loss, excluding the period of World War II.

Most of the losses were due to the fact that political corporate decisions were often made that did not always correspond to economic management. Among other things, the company had to purchase its locomotives from all Canadian manufacturers, which ultimately led to higher maintenance costs and inefficient operation. In addition, in contrast to its competitor CPR, the company invested more funds in the research and development of new security and logistics systems and special agreements were also made with the trade unions.

The company also had a large number of uneconomical branch lines, where the generated income did not even bring in the maintenance costs. It was only with deregulation in 1978 that the CN was able to shut down these routes, sell them to third parties or even set the freight rates itself.

An important step towards better business management took place in 1978 with a recapitalization and repositioning of the company as a profitable Crown Corporation . This made the Canadian National largely independent of the state's influence on business decisions and for taking on debt itself. Subsequently, in the eleven years from 1978 to 1992, the company was in the black and generated around 370 million Canadian dollars in dividends.

Realignment and rationalization

The CN Tower, commissioned by the railway company, was sold in the 1990s

As part of the recapitalization and realignment, the company began to specialize in rail transport and thus sell the other operational areas. In 1977 the airline Air Canada was spun off as an independent Crown Corporation. In the same year the ferry activities followed, which were outsourced to the Crown Corporation CN Marine . A year later, CN's rail passenger transport, along with the corresponding CPR services, was transferred to a separate Crown Corporation named VIA Rail , based on Amtrak . The activities in Newfoundland were concentrated in the subsidiary Terra Transport in order to be able to better represent the federal grants received for this. Furthermore, the truck fleet, a hotel chain, real estate and the telecommunications company were sold. In the early 1990s, the CN Tower in Toronto, still known today under its original name, was sold. With the proceeds from the sale of the up until then continuously loss-making lines of business, CN's debt level could be reduced.

The economic situation could also be improved through the sale or closure of many branch lines that had been built due to government demands or were created for grain transport during the boom of the 1920s and 1930s and had become superfluous through the construction of a road network. In the period from the late 1970s to the early 1990s, thousands of route kilometers were shut down. In 1988 the operation of the subsidiary Terra Transport (route networks in Newfoundland and on Prince Edward Island ) also ceased . The closures affected all rural areas of Canada, raising voices against the railroad company and the federal government in these areas. Many of the routes have now been converted into recreational routes by the municipalities and provincial governments.

privatization

At the end of the 1980s, the CN rail network consisted of the extensive main network in Canada and subsidiaries in the United States: Grand Trunk Western Railroad (GTW) in Michigan, Indiana and Illinois; Detroit, Toledo and Ironton Railroad (DTI) in Michigan and Ohio; Duluth, Winnipeg and Pacific Railway (DWP) in Minnesota; Central Vermont Railway (CV) along the Connecticut River from Québec to Long Island Sound ; and a former Grand Trunk route to Portland, Maine (also known as Grand Trunk Eastern ).

From 1992 onwards one began to prepare intensively for the planned privatization, among other things with productivity increases. This was mainly done through extensive cuts in the inefficient management structure, downsizing and the closure or sale of branch lines. In the years 1993 and 1994 attempts were made at times to market the different names CN , Grand Trunk Western and Duluth, Winnipeg, and Pacific under the common name "CN North America". During this time there were also merger talks with the Canadian Pacific, but these were broken off by the federal government. The CPR later offered to acquire the eastern route network from Ontario to Nova Scotia amid rumors that a United States railroad company wanted to acquire the routes in western Canada, but that too was refused. From 1995, the entire group was consistently marketed under the uniform name CN.

With the CN Commercialization Act of July 13, 1995 and November 28, 1995, the entire company was floated on the stock exchange (Initial Public Offering) and all shares were sold to private investors. The law contains two important points: First, no person or company may own more than 15% of the company. In addition, the headquarters must remain in Montreal, which means that CN remains a Canadian company.

Acquisition of Illinois Central

After the IPO, the shares made impressive gains. On February 11, 1998, during the heyday of the US railroad industry's wave of mergers, the CN acquired the Illinois Central Railroad (IC) for $ 2.4 billion, adding 4,250 km to its route network. Since then, the company has also had a connection from Chicago to New Orleans. At the same time, a north-south runway was created from the former east-west runway located entirely in Canada. The CN thus became one of the most important transporters of Canadian raw materials to the United States and, through a strategic alliance with Kansas City Southern , also to Mexico.

Failed merger with the BNSF

In 1999, the CN and the Burlington Northern and Santa Fe Railway announced the planned merger of their companies to form "North American Railways" based in Montreal. The announcement was received with great suspicion by the US regulator Surface Transportation Board and competing companies Union Pacific and Canadian Pacific.

The customers of the future company also feared a deterioration in the service. This is mainly due to the negative experience following the merger of the Southern Pacific and the Union Pacific. Under pressure from the railway industry, customers and politics, the STB issued a 15-month moratorium on the approval of mergers. The two railway companies then ended their merger talks and have not yet resumed them.

Acquisition of Wisconsin Central

After the expiry of the moratorium, on October 9, 2001, CN acquired Wisconsin Central (WC) including its majority stake in the largest British rail freight company English, Welsh & Scottish Railway (EWS) for 1.2 billion dollars. This closed an important gap in the CN rail network south of Lake Michigan and Lake Superior and made the connection between Chicago and Western Canada cheaper. The purchase also included the toilet subsidiary Algoma Central Railway . There was now also access to Sault Ste. Marie and the Upper Peninsula of Michigan.

Acquisition of BC Rail

On May 13, 2003, the provincial government of British Columbia announced the sale of its Crown Corporation BC Rail (BCR). The winner in the bid process should receive the locomotives, freight cars and the necessary service facilities. The track systems and rights of way remain in state ownership and are leased to the operator. On November 25, 2003, it was announced that Canadian National had won the bid for 1 billion Canadian dollars ahead of the Canadian Pacific and some US companies. The deal was completed on July 15, 2004.

As a result, CP Rail and other unsuccessful bidders suspected that the bidding process had been manipulated, but this was rejected by the government. It was also suspected that the program to stimulate the economy along the railway line was intended to encourage the municipalities along the BCR lines to cooperate with the new operator CN.

Acquisition of Great Lakes Transportation

In October 2003, CN announced the acquisition of Great Lakes Transportation (GLT), a transportation holding company of the Blackstone Group, for $ 380 million. GLT owns the Bessemer and Lake Erie Railroad , the Duluth, Missabe and Iron Range Railway, and the Pittsburg and Conneaut Dock Company. The trigger for this purchase was a 17 km long stretch of the DMIR near Duluth . Since the takeover of Wisconsin Central by the CN, this was the only section of the Chicago - Winnipeg connection that the CN did not own, but could only use through trackage rights . While the CN initially only wanted to acquire this section of the route, Blackstone offered the GLT exclusively for purchase. GLT also owns eight cargo ships for the transport of coal and iron. After the approval by the Surface Transportation Board, the complete takeover of GTL by CN took place on May 10, 2004.

CN today

EMD GP9U in Toronto Railway Station

Due to legal aspects, the CN operates as the Grand Trunk Corporation in the USA . Outwardly, however, the entire company appears as CN both in Canada and in the USA, which is also clear from the lettering on the vehicle and wagon fleet.

Since the acquisition of Illinois Central, the CN has switched to moving scheduled freight traffic into the center of operations. The result is better relationships with customers and a smaller inventory of necessary locomotives and freight cars. In addition, the route network was further optimized by eliminating double tracks on less-used sections, while crossing tracks were lengthened on more heavily used connections.

The Canadian National was also a leader in the introduction of radio controlled shunting locomotives in North America, which led to the reduction of jobs in the marshalling yards. Thanks to various other measures, the company has the reputation of being the most-improved railroad in North America, with high productivity, a good earnings ratio and ever increasing profitability.

In September 2007, Canadian National announced the acquisition of Elgin, Joliet and Eastern Railway , a shunting and freight transportation company in the Chicago area, from US Steel . In January 2009 the successful acquisition of Elgin, Joliet and Eastern Railway was announced.

The Canadian National route from Prince Rupert Port to Chicago is the connection from the Pacific to the western United States with the lowest gradients (max. 10 ‰). The freight rate per container is about $ 300 lower than the BNSF or Union Pacific routes from the Port of Los Angeles .

passenger traffic

With the establishment of the CNR, a large number of existing passenger train connections from the predecessor railways were taken over. These were then gradually combined into an overall system. Among other things, the “Continental Limited” was created between Montreal and Vancouver, which operated on routes from four predecessor companies. In the 1920s, the number of passengers rose sharply. The CNR responded with new train connections and services, such as radio on the trains. These boom years ended with the Great Depression (1929–1939), and the onset of decline in passenger traffic was only briefly interrupted by the rise in passenger numbers during World War II. At the end of the war, many passenger train cars were worn out; some accidents between 1947 and 1950 showed the dangers of collisions with passenger trains consisting of older cars. The CNR therefore acquired 359 lightweight passenger cars in 1953 in order to equip all important connections with new rolling stock.

On April 24, 1955, the new transcontinental train The Canadian of the Canadian Pacific ran for the first time . In competition with the Canadian National, the Super Continental with a new streamlined car was put on the rails. However, the CN train never achieved the reputation of the CP train, among other things, it did not have any observation cars.

At that time, the decline in rail passenger transport due to competition from cars and airplanes was already in full swing. In the 1960s, therefore, the CP reduced the number of their train connections, while the CN tried to maintain most of their services and get passengers back on the train.

In 1968, the CN introduced express service between Toronto, Montreal and Québec . New railcars with gas turbines ( UAC TurboTrains ) built by the United Aircraft Corporation traveled the route significantly faster than the previous trains, but were uneconomical in comparison and also unreliable in the first few years. In 1982 they were shut down and scrapped.

In 1976, CN founded a subsidiary called VIA, which was solely responsible for passenger traffic. The company began to coordinate its marketing for rail passenger transport with CP Rail and was soon converted into an independent Crown Corporation especially for long-distance passenger transport. On April 1, 1978, VIA Rail took over passenger services from Canadian National, and in October 1978 also CP Rail. Local transport in Montreal was handled by the CN until 1982 and then taken over by the Montreal Urban Community Transit Commission.

Since the takeover of the Algoma Central Railway (ACR) in 2001, CN has been operating passenger services again in the form of the earlier ACR services in Ontario on the route between Sault Ste. Marie and Hearst as well as a few other tourist trains on the ACR network. With the acquisition of the British Columbia Railway in 2004, the CN took over their regional passenger transport, which connects the in British Columbia inaccessible by road Seton Portage with the nearest town Lillooet .

Locomotives

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The first steam locomotives with the 2'D2 'wheel arrangement were ordered by CNR in 1927. Over the next 20 years, more than 200 such vehicles were procured for freight and passenger traffic. Locomotives with a 2'D1 'wheel arrangement were also used for passenger transport.

The first experiments with diesel-electric locomotives from Westinghouse began as early as 1929 . The locomotives numbered 9000 and 9001 were the first such vehicles to be used on a main line in North America. They showed the benefits of diesel traction, but the vehicles themselves were very unreliable. The conversion to diesel operation began after the Second World War and was completed in 1960. The locomotives came from General Motors and the Montreal Locomotive Works .

EMD FP9 and CLC CPA16-5, ALCO FPA-2 and ALCO FPA-4 were procured for passenger transport . In addition there were 60 railcars of Budd and some equipped with heating generators freight locomotives. VIA took over most of the passenger locomotives in 1978.

Corporate management

The management of the company was led by the following men:

Presidents and Chief Executive Officers

Chairmen of the Board

Web links

Commons : Canadian National Railway  - Collection of Images, Videos, and Audio Files

notes

  1. ↑ a b Candadian National Railway Annual Report 2014. (PDF) Canadian National Railway Company, June 2016, accessed on April 9, 2016 (English).
  2. ↑ Converted at the rate on the balance sheet date, December 31, 2015
  3. ↑ US Port and Inland Waterways Modernization: Preparing for Post-Panamax Vessels , p. 29, June 20, 2012
  4. ↑ Historical Heads of CN | cn.approx. Retrieved October 12, 2017 .