CN sees Prince Rupert Port as a bright spot in its future

"We are already trying to figure out, and we are confident enough, that we are trying to figure out ways we increase capacity through the facility as well."--Hunter Harrison, CN Rail CEO speaking about the Fairview Container Terminal.

While the economic slowdown continues in the USA and other economic factors begins to affect the world of shipping, CN still finds that the Prince Rupert advantage will be something to trumpet to importers and exporters over the next few years.

The railroad is looking towards its transportation partners to begin to increase the current through put through the Fairview facility, with an eye towards larger ships arriving and of further expansion of the port's handling capabilities in the future.

Hunter Harrison, CN's CEO outlined his thoughts on the state of shipping and his railroad during a conference call earlier this week, the Daily News offered some of his talking points in a front page story in Thursday's paper.

CN BOSS BULLISH ABOUT PORT PROSPECTS FOR EXPANSION

He is expecting to see more large ships calling at Fairview
By Leanne Ritchie
The Daily News
Thursday, April 24, 2008

Pages one and two

In between a harsh winter, a slumping U.S. economy and high fuel costs, the new intermodal container terminal operations in Prince Rupert remained a bright spot for CN Rail in the first quarter of 2008.

During a conference call with analysts earlier this week, Hunter Harrison, CN's chief executive officer, said the company is on track to meet its projections of $100 million in revenue from the first year of operations and, despite a softening in import volumes, the rail company is continuing discussions with shippers to add more volume at the Maher Terminals facility.

"The $100 million in revenue in guidance for this year is still right on track," said Harrison. "I have been more optimistic in the past and thought we would have had more of that capacity filled by now but clearly the import volumes into North America from Asia are down."

There are two reasons CN believes it can beat its earnings estimate for volumes moving through the facility.

"One is we continue to have dialogue with additional customers and there are still a number of steamship companies and consortiums that are talking to us about making Prince Rupert a new port of call," Harrison said. "Also, we are talking to COSCO and their business partners about increasing the size of vessels they may use to call on Prince Rupert because of some rationalizing that is ongoing between the Atlantic and Pacific calls. This would also add the capacity to bulk up our numbers for this year."

COSCO began moving containers through the terminal in October of 2007. The ships stoping in Prince Rupert are part of the CKYH Alliance's Pacific Northwest Butterfly South Loop service, of which COSCO is one of four shipping lines. Each ship has a capacity of 5,400 TEUs (average 20-foot containers.)

And despite the slump in import volumes and problems in the U.S., Harrison said they are still working on ways to expand capacity at the port.

"We are already trying to figure out, and we are confident enough, that we are trying to figure out ways we increase capacity through the facility as well," he said.

It's been a hash winter for CN Rail, and soft markets have the company reducing its earnings forecast. CN released its first quarter results, with earnings falling four per cent to $311 million.
CN executives said its results were impacted by a severe winter in many parts of North America, high fuel costs, a strong Canadian dollar and slumping American economy.
"Thank God it's spring time," said Harrison.

The extreme cold and snow affected the entire system this winter, including Prince Rupert-to-Prince George.

In January, CN took the unprecedented step of suspending most operations in the West for almost two days to ensure the safety of employees.

"Clearly, I thought last year was a bad winter. This year went far beyond," he told analysts, noting record snowfall in Quebec, Ontario, Michigan and Wisconsin.

CN said weather challenges cost the company three cents per share of lost earnings.
"Contrary to other reports, I thought we bounced back pretty quick," he added, rejecting one analyst's suggestion that the company may have ended up cutting expenses too deeply.

Due to the challenges facing the U.S. economy and fuel costs, the railway also lowered its 2008 diluted earnings per share forecast to the "mid-single digit" range over 2007 earnings per share of $3.40. That's down from an earlier forecast of "mid-to-high" single digit growth. Revenues should grow at between six and eight per cent, the Montreal-based railway said.

The Promise of Prince Rupert

The Port of Prince Rupert receives another glowing review from a business magazine, as Business Review takes a look back at the recent opening of the Fairview Container Port.

Things don't start off too well, there's the usual recounting of the town's history, the decline of our population and industry and all that, but being a business magazine the downer is quickly turned around with an upside, the new port and it's part in the world of global trade.

Darcy Jenish picked up some points from Hays' Orphan: The Story of the Port of Prince Rupert, to flesh out his synopsis of the city's maritime past, but there's not a great deal of detail to glean from the opinion piece in the November 30th article.

It's not going to give a reader any great deep insights into the current state of the Rupert economy or whether we bounce back from our current hard times.

But for the Port and CN, it's a positive bit of news that keeps the northern corridor in the business loop. As it highlights the advantages that CN and the Port have been stressing to industry, since the container port opened in October. Which we suppose is the purpose of an article in a business trade publication.

And as they say in advertising, as long as they spell your name right, right?

Prince Rupert's promise is finally realized

Port becomes new intercontinental transportation hub
By D'Arcy Jenish -

Business Edge

Published: 11/30/2007 - Vol. 7, No. 24

The town of Prince Rupert was little more than a crude coastal settlement, hacked out of the bush on an island some 800 kilometres north of Vancouver, when Sir Wilfrid Laurier, the prime minister of Canada, visited in August 1910 and declared: "I have no doubt that some day Prince Rupert is destined to be one of the very great cities of the North American continent."

A railway builder, Charles Hays, president of the Grand Trunk Pacific, had chosen the site as the terminus of his new transcontinental line because it had one great natural advantage - an ice-free deepwater harbor that was 14 miles long.

Hays hired the Boston landscape architects Franklin Brett and George Hall to design a townsite and they created a plan for a community of 45,000 people.

Hays died on the Titanic in April 1912, and Prince Rupert's prospect went down with him.
The town's population peaked at 19,000 a decade ago but has tumbled to just under 13,000 due to a series of economic setbacks.

The port languished as an outpost that handled grain, lumber and coal exports to Asia, a fate nicely captured in a local history titled Hays' Orphan: The Story of the Port of Prince Rupert.
But the orphan's fortunes have taken a turn for the better.

These days, some people believe that Prince Rupert may emerge over the next decade as a rival of Vancouver, Seattle and Los Angeles - currently the three major western gateways to North America for containers arriving from Asia stuffed with consumer goods.

This fall, the Port of Prince Rupert became the hub of a new intercontinental transportation corridor that links manufacturers in Asia with markets in the heart of North America.

On Sept. 12, the community celebrated the grand opening of the $150-million Fairview container terminal, a partnership of the port authority, CN Rail, the China Ocean Shipping Co. (COSCO) and Maher Terminals of Canada Corp.

Some six weeks later, on Oct. 30, the first ship arrived - the COSCO Antwerp - and 360 containers were loaded directly onto flatcars. The 9,000-ft.-long train departed for Chicago on Nov. 1 and arrived in 91.5 hours.

By comparison, a similar train travelling from Vancouver to Chicago normally takes about 107 hours.

"We can offer importers or exporters with the shortest and most reliable route between Asia and the North American heartland," says Don Krusel, president of the Prince Rupert Port Authority. "Everybody has timetables, but they're inconsistent because of congestion.

"One trip may take 100 hours. But next time it's 160 hours or even 200 because railcars get stuck on a siding somewhere."

Prince Rupert's location, once a liability, is now its greatest advantage.

Hong Kong and Prince Rupert are 5,286 nautical miles apart. By comparison, the distance to Vancouver is 5,777 nautical miles, to Seattle it is 5,768 and to Los Angeles 6,380.

Similar differentials exist for every other major Asian port and that can cut sailing times by up to 58 hours.

At this point, though, Prince Rupert is a small fry compared to its big-city counterparts. The Fairview terminal has a capacity of 500,000 TEUs - a shipping term that means 20-ft.
equivalent units - compared with Vancouver, which can handle 2.2 million TEUs yearly and Los Angeles, which moves more than seven million per year.

But the partners have big plans for the new terminal. Engineering studies are nearly complete for a $650-million second phase of the Fairview terminal, which will add 1.5 million TEUs annually by 2010.

"By the year 2020," Krusel says, "we expect to have the capacity to move 10 times what we can do today.

"Vancouver's current capacity is 2.7 million and they have plans to go to 4.5 to five million."
Krusel describes the Fairview terminal as "transformational infrastructure," by which he means it has the potential to boost exports from many communities along the CN's northern line.

The railway has already moved to take advantage of the opportunities by opening the Prince George Distribution Centre in the interior city of the same name.

It will be used to fill containers with lumber, wood panels, pulp, paper, as well as ores, plastics and metal products for export to Asia.

Krusel adds that Prince Rupert enjoys one other crucial advantage over larger ports located within major urban areas.

The facility can grow without encountering opposition from surrounding communities already concerned about noise, traffic and congestion.

In fact, at the grand opening of the Fairview terminal in September, nearly half the town's residents showed up when the gates were opened to the public.

"The mayor gave a speech and talked about the need for Phase 2," recalls Krusel, "and this huge crowd started chanting: 'Phase 2, Phase 2.' "

Rupertites help Prince George celebrate new terminal

Prince Rupert sent a contingent of 11 to help CN and Prince George open up their new inland shipment terminal, destined to be an important link to the Fairview Container Port.

Last Saturday, representatives of the Port Authority, Chamber of Commerce, Ministry of Economic Development and the Daily News were flown into the Central Interior to attend the grand opening of the Prince George terminal.

High on the agenda of speech making for the day was an acknowledgement of the importance of CN Rail to the development of the transportation corridor from Prince Rupert through to the southern United States, a corridor that now will benefit Prince George, by making it a distribution and loading centre for containers of BC and Alberta goods destined for Asia.

The Daily News featured the day’s activities as the front page story in Tuesday’s paper.


PRINCE GEORGE EAGER TO TAP INTO PORT'S NEW LINK TO ASIA
By Kris Schumacher
The Daily News
Tuesday, November 27, 2007
Pages one and three

PRINCE GEORGE - Prince George on Saturday morning offered quite a change of scenery and climate for the 11 Prince Rupert representatives who attended the grand opening of CN Worldwide's new Distribution Centre and Intermodal Terminal.

But even the snow and negative temperatures couldn't keep members of the Prince Rupert Port Authority, Prince Rupert Chamber of Commerce, Ministry of Economic Development and The Daily News from attending the event that took place inside CN's 84,000-square-foot warehouse facility.

Some 160 other invited guests also braved the frigid conditions to be a part of the noon-hour ceremony, joined by CN staff members as well as local and provincial politicians.

“All of us at CN are proud of our new facility. It used to be an old diesel shop, is’ sure changed,” said Jim Vena, senior vice-president of the western region for CN. “The new facility is a sign of CN’s commitment to this community and recognition of what it offers.”

The facility is the result of a $20 million investment by CN. Products will arrive at the facility either loaded in boxcars on rail tracks that enter the building, or by truck through any of the warehouse’s 38 bay doors. Goods that are destined for Prince George and the surrounding area are unloaded and Canadian products to be shipped overseas to Asia will then be stuffed into containers.

CN is able to move the loaded outbound containers to the container terminal here in Rupert in 15 hours, before they will be loaded aboard ships destined for Asia after brief stops at the ports of Vancouver and Seattle.

“In essence, CN, along with many of you here today have created a supply chain without any weak links,” said Vena. “For us at CN, it’s a dream we’ve had for a number of years, and it took a lot of work to get the terminal in Prince Rupert open. But now that it is, the opportunity is for Prince George and the surrounding communities and the service we can provide for Northern B. C.”


The Distribution Centre and Intermodal Facility will provide rail service daily, and operate from 5 a. m. to 9 p. m. seven days a week. Using lifts and yard tractors, the facility comprises the 84,000 square foot warehouse along with another 10 acres of outside storage.

The facility will be able to accommodate an annual capacity of up to 25,000 containers, with the potential for expansion. The products handled at the distribution centre will include, lumber, panel, wood, pulp and paper, as well as various palletized and bagged goods.

“Today, there’s a new corridor opening up, a corridor opening up between the fastest growing economies of the world in Asia and North America, and Prince George is going to play a very important role as we expand the new Asia-Pacific Gateway,“ said Kevin Falcon, B. C. Minister of Transportation. “If we are truly going to see this gateway materialize and benefit all of our communities, we have to make sure our entire transportation network is operating in sync, so that British Columbia, will, in fact, become the great gateway to Asia from North America.”

Prince Rupert Port Authority President and CEO Don Krusel also spoke to the guests, and began by acknowledging that there would be no trade corridor today without the work of CN Rail.

“Without that ribbon of steel rails that extends from the Port of Prince Rupert through Prince George and all the way to destinations in the heartland of North America, we would not be able to begin talking about importing Asian goods and exporting Canadian goods,” said Krusel. “This rail system, the best-operated rail system in North America, has allowed us to even dream of having this trade corridor, so thank you CN.”

The opening of the Prince George container facility marks one of the last developments to be completed, in what will be the first of many stages for container trade expansion between British Columbia and Asia.

Opening day for Prince George Intermodal Centre

The were celebrating in Prince George on Saturday, as CN officially opened their Intermodal Centre with a wide assortment of officials in tow to sing the praises of the new facility.

Opinion 250 has a complete report on the grand opening including video of the operation and the opening remarks that saluted its arrival on the transportation scene for the North.

The Centre will be used primarily to load containers with products from the North east and Central Interior of the product for shipment through to Prince Rupert. It is one of the side benefits of the Prince Rupert container port that have come to the Central Interior city.

CN recently expanded their workforce in the city to take advantage of the new transportation corridor that travels from the West Coast through Western Canada and into the south eastern United States. So far the new 20 million dollar centre in Prince George has created 60 new jobs to start, with hopes that they may expand the job opportunities in the years ahead.

Interestingly enough in his remarks, Port CEO Don Krusel said that the port hopes to expand by 2020. Which is probably a tad slower than many in Northern BC might like to see.

The Prince George Citizen also covered the Grand opening today on their website.

Selling the merits of the Fairview Terminal in the Windy City

The Chicago Business community received an in depth update on the Fairview Container Terminal and a nudge as to how the American mid west could make the North coast work for them.

CN Rail and the province's Ministry of Economic Development attended an International Business Summit in Chicago, highlighting the new trade route to Asia through Prince Rupert and showcasing the investment opportunities that are available with the introduction of container service through the Port of Prince Rupert.

The details of that conference and similarly themed one in Edmonton were the topic of the front page of Thursday's Daily News.

EDMONTON, CHICAGO BUZZ WITH TALK OF RUPERT'S PORT

Two Big Business gatherings exalt the virtues of B. C.'s newest link to Asia

By Leanne Ritchie

The Daily News

Thursday, November 15, 2007

Pages one and three

The Port of Prince Rupert was a talking point in Chicago yesterday for the provincial government, as they discussed the benefits of the new northwestern trade corridor with Chicago businesses.

Representatives from CN Rail and the Ministry of Economic Development attended an International Business Summit in the windy city, in part to discuss new transportation and investment opportunities available since the opening of the Fairview Container Terminal.

"The objective is to deepen B.C.'s economic and commercial relations, and to raise B.C.'s profile internationally," said Colin Hansen, Minister of Economic Development.
"With easy access to markets in Asia, Europe and the U.S. and an unparalleled quality of life, B.C. is a place for businesses to thrive."

The event was organized jointly by the province and B. C. Technology Industry Association and included a full day of topical panel sessions to discuss investment opportunities in sectors such as transportation and venture capital investment.

CN has been marketing the opening of the Fairview Container Terminal as a new way for companies to access the Midwestern markets.

CN also recently acquired the Elgin, Joliet and Eastern Railway Co. (EJ&E) in Chicago and this could result in the movement of cargo from Prince Rupert to Memphis in 100 hours by 2011.

Currently CN is committing to moving product 3,000 miles (4,960 km) from Prince Rupert to Memphis in 117 hours, and to Chicago in 100 hours.

“Once the EJ&E line is integrated into the CN network, cargo will be transported from Prince Rupert to Memphis 13 per cent faster than from other North American West Coast ports,” noted Don Krusel, Prince Rupert Port Authority president and CEO earlier this month. “This will further enhance the Port of Prince Rupert’s competitive advantage.”

The acquisition, which is expected to receive approval from the U. S. Surface Transportation Board in 2008, will significantly improve service reliability as well as transit times by moving CN trains out of the congested Chicago urban core to EJ&E lines bypassing the city.

In addition, the new transportation corridor will be centre stage at the Asia Pacific Forum in Edmonton.

The event opened Tuesday with presentations by Prince Rupert Mayor Herb Pond, Prince George Mayor Colin Kinsley and Edmonton Mayor Stephen Mandel.

Then on Wednesday, there was a joint panel presentation by Don Krusel, and representatives from Maher Terminals, COSCO shipping and CN Rail.

The forum offer a platform to discuss how Canada’s exporters and importers can use the Asia Pacific Gateway to access Asia via Prince Rupert and Vancouver, and access North American markets through Edmonton.

The event wraps up today.

Big Oil must pay Big Rail for Big Mess

A long standing disagreement between Imperial Oil and CN Rail has finally worked its way through the judicial system, with Imperial Oil ending up having to write a check to pay for the clean up of the old tank farm area along George Hills Way.

The issue which goes back many years into the past century came to an end last week as the Hon. Justice Bryan Findlay Ralph made judgment in favour of the Railroad ordering Imperial Oil to pay $724,000 for soil contamination on a portion of the site along George Hills Way. The bill could have been higher, but the Court decided that Imperial Oil was not responsible for a clean up of the whole site, bouncing that back into the boardrooms of Canadian National.

The Daily News featured details of the long running saga in Tuesday’s paper.

Oil firm told to pay clean-up costs
Contamination of site on George Hills Way ruled on in B. C. Supreme Court
By Leanne Ritchie
The Daily News
Tuesday, October 30, 2007
Pages one and five

The B.C. Supreme Court has ordered Imperial Oil to pay CN Rail almost three quarters of a million dollars for environmental damage done to property in Prince Rupert.

In a ruling handed down last week, the Hon. Justice Bryan Findlay Ralph ordered Imperial Oil to pay $724,000 for soil contamination on part an old fuel tank site along George Hills Way.
For much of the last century, the land was leased from CN to Imperial Oil.

According to James Kay, a civil engineer who was called as a witness for CN, there is fuel and metals present in the soil, specifically arsenic, that exceed the criteria for commercial land use.
"The potential sources of arsenic include the oil itself, sandblasting operations, sand bedding for the tanks, residue from the tank bottoms, residue from the boiler house, and from operations such as tank maintenance, construction and demolition," Kay told the court.

Heavy metals also may have been transported to the site in fill brought in by Imperial Oil, he said.

While Imperial Oil admitted its activities caused the hydrocarbon contamination at the property, it denied responsibility for the presence of heavy metals.

The court ruled Imperial Oil has to pay for the clean-up of those areas of land where substantial soil testing has been done, about 2,350 square metres of land.

CN had asked for a settlement to cover the entire area where Imperial Oil conducted activities, 6,000 square metres. That may have cost as much as $3.1 million.

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However, the court ruled there was not enough evidence to force Imperial Oil to pay for a clean-up of the whole site.

The cost of testing this area to produce evidence was estimated to be in the range of $400,000, and according to the court, CN was reluctant to undertake such testing.

It is unknown whether CN will appeal the ruling or pursue further remediation costs, under the Environmental Management Act. It is also unknown if CN has begun to remediate any areas of the site or what it plans to do with the property in the future.

“We have received the decision and we are reviewing it, said Kelli Svendson, CN Rail spokesperson.

The case goes far back into Prince Rupert’s history – Imperial Oil first leased the property from the railway company’s predecessor, the Grand Pacific Railway Company, on Aug. 1, 1914, in order to distribute oil.

Imperial Oil constructed at least 16 above ground storage tanks (AGSTs) to hold petroleum products on the site. There was also a boiler house, a pump area, and product transfer piping that ran to a location on the waterfront. It appears that during the Second World War, the company moved a number of storage tanks off a bluff onto areas on the site that had been partially blasted out of the rock cliffs in the southern portion of the property. In 1993, Imperial Oil decommissioned its operations on the site and the storage tanks and other structures were removed from the property. Imperial Oil did not, however, seek to terminate its lease until Aug. 27, 2002.

CN is excited about the port’s opening and the opportunities it will bring

Having invested a fair hunk of change on infrastructure and rail line improvements tied in with the Fairview Container Port, Canadian National is looking forward to the arrival of container ships in Prince Rupert and the opening of the Northwest gateway to Asia.

Prince Rupert is now firmly in place on the CN map as the key operation in the transit of goods between continents, the loading dock if you will to the railroads continent wide rail network.

The Daily News from Tuesday featured an in depth article with Jim Foote, the executive vice president of sales and marketing with CN Rail who delivered the company’s enthusiasm over what Prince Rupert may bring to transportation in North America. Included in his thoughts was an announcement that CN has found a backhaul product that will make use of the thousands of containers that will arrive with each ship.

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Distiller’s dried grains is a product that is used in animal feed and could find a huge market in Asia. If it proves to be popular there, the shipment of it will not only provide jobs in North America (Wisconsin and Alberta to be precise), but reduce the number of containers that are emptied in North America from each crossing.

It was but a small example of the changing economy and how Prince Rupert will soon play a major role in CN’s delivery of products to the world.

RUPERT ‘BIGGEST KEY ELEMENT’ FOR CN
Senior Manager with CN excited by company’s business opportunities
By Leanne Ritchie
The Daily News
Tuesday, September 18, 2007
Page one

CN Rail is optimistic it has found a new product that it can pack in containers and send back to Asia: animal feed produced from ethanol production.

Jim Foote, executive vice-president of sales and marketing with CN Rail, said the company recently announced it will stuff distiller’s dried grains (DDG’S) into the empty containers that will be moving back through the Fairview Terminal to Asia.

“We think there will be the opportunity to move DDGs, the derivative by product of making ethanol. It’s left over once they distill (the grain), it gets palletized and becomes animal feed. We think there is a huge opportunity there to move that back to Asia as well,” said Foote, during the grand opening of the Fairview Container Terminal last week.

Investing in a stuffing facility in Wisconsin would be in addition to the investments CN has made in a $4 million grain stuffing facility in Edmonton, the forest products stuffing facility currently under construction in Prince George and facilities in Chicago and Memphis were CN has expanded capacity in anticipation of trade volume from the new container terminal.

“We have invested a significant amount on it and we are willing to invest more in other areas of our network to help support this port as well,” said Foote.

“Right now, Prince Rupert is about the biggest key element we have on our network. I don’t mean that in a joking manner. It’s a key project and we are committed to it.”

He said the company is very excited about the opening of the port.

“It connects on the far west end of our network. We have a lot of traffic coming in destined for the far end our network. Our network goes directly to Toronto, Montreal or down to Chicago and Memphis,” he said.

We are looking very aggressively for opportunities where we can take the empty containers, frill them and send them back to Asia.”

Ethanol, a bio-fuel, is produced from grains such as corn by mixing dry-milled grain with water to form a mash. Enzymes are added and the mixture is heated before being allowed to ferment. The main products are ethanol, carbon dioxide and animal feed (DDG’s.)

Since the lease of B. C. Rail to CN the company has been moving more traffic along the northwestern corridor, however Foote noted it is mostly bulk traffic, with grain and coal headed to the two terminals on Ridley Island.

“It’s a very good route for us and we have been working with the grain shippers as much as we can and the volumes have gone up… also the coal volumes continue to grow and we promote the bulk terminal as much as we can.”

Other investment by CN includes upgrades to rail traffic control systems west of Prince George and siding extensions that will increase capacity from Prince Rupert through to Memphis. CN has also upgraded tunnels and bridges and acquired 2,250 intermodal platforms and 50 new locomotives specifically to support expanded services.

Liberals suggest that NDP calls for rail safety are "grandstanding"

Transportation Minister Kevin Falcon is not very impressed with the calls from the NDP for a harder look at rail safety in the province.
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In an article with the Prince George Citizen, Falcon suggested that NDP transportation critic David Chudnovsky was merely grandstanding, and should be directing his concern towards the federal government.

Falcon went so far as to suggest that without CN's participation in the transportation needs of BC that the Port of Prince Rupert may never have been developed as it has been in the last two years, not to metion the booming times that the rail road apparently is bringing to Prince George.

The issue of rail safety once again jumped to top of the list with the derailment of a CN train in Prince George on August 4th, the latest in a string of high profile problems for the railroad.

And while it perhaps may be that rail safety is a Federal responsibility, it does seem rather unusual that the province doesn't seem to have any inclination in examining safety issues that affect the residents of the province, but instead seem fixated on the financials.

It's a bit of political theatre and some misguided priorities that may come back to haunt them at some future date.


Rail safety up to feds, Liberal minister says
(News) Friday, 17 August 2007, 00:00 PST
by SCOTT STANFIELD Citizen staff

NDP transportation critic David Chudnovsky should be directing his five-point plan on improving CN Rail's safety record in B.C. to the federal government, not the province, says B.C.'s transportation minister.

"It's political grandstanding. Period. Full stop," Transportation Minister Kevin Falcon said regarding Chudnovsky's criticism in a Citizen story Thursday.

"He knows full well that the railways, just like the airlines, are totally regulated by the federal government. If he has suggestions on deficiencies in the federal regulatory structure, he should write to the federal government.

"The real issue here is that the NDP are bitter over the fact that we entered into the B.C. Rail/CN Rail long-term lease arrangement," added Falcon, a Liberal MLA for Surrey-Cloverdale. "But the fact of the matter is, accidents come under the jurisdiction of the Transportation Safety Board."

Chudnovsky's plan, which includes whistleblower legislation, comes on the heels of the Aug. 4 derailment when two trains collided on the bank of the Fraser River in Prince George. The safety board has launched an investigation into the accident, which CN has said was a result of human error.

"I actually think the regulator has done exactly what you would expect the regulator to do. They've put some temporary restrictions in place while they undertake the investigation," Falcon said.

"They (NDP) constantly get hysterical every time something happens with a CN train, yet they conveniently ignore accidents on other railways. I'm just as concerned about the CP (Canadian Pacific) derailment that took place in April where they had a conductor that died up in Trail, yet we never heard a peep out of the NDP about that. And that just shows how this is all politically driven, because they've never gotten over the fact that we entered into that deal with CN. But the fact of the matter is that deal, for Prince George in particular, is turning out to be, I believe, absolutely fantastic for the future of Prince George, because, of course, they're investing into turning the whole Prince George area into a major inland distribution centre.

"We could not have had the Port of Prince Rupert go forward without CN. They're absolutely critical because of their contacts with all the major retailers in North America and shippers around the world."

CN’s recent troubles has NDP calling for inquiry into safety

With the Prince George derailment just the latest problem for CN rail, the provincial NDP are calling for a public inquiry into the troubles the railway is having.

The Daily News featured details of the NDP call for action in Wednesday’s paper.

B.C. NDP call for rail enquiry
By Christian Webber
The Daily News
Wednesday, August 08, 2007

The provincial NDP is demanding a public inquiry into safety on CN Rail in B.C. after a derailment and explosion in Prince George over the weekend.

The inquiry is part of a five-point plan being presented by New Democrat transportation critic David Chudnovsky to improve safety on the railway.

David Chudnovsky, MLA from Vancouver-Kensington, also the opposition critic for transportation, spoke from Vancouver about his five-point plan and new policy announcement yesterday.

"We all know that this is one of a series of problems that we face in this province. Almost exactly two years ago the Cheakamus accident took place.

"Last summer two CN workers were killed in Lillooet," said Chudnovsky.

He said that there have been dozens of other problems and derailments that have gone unreported so he is making public the new five-point plan to improve CN Rail safety.

"I thought it was very important that we move forward and get the situation to become better rather than continue with the ongoing fate of derailment," said Chudnovsky.

The first of his five-point plan that he believes will improve rail safety is to call on the government to make public any and all records of talks between CN and the B.C. government at the time of the sale of B.C. Rail to CN.

"Any and all discussions that took place at that time with respect to safety, maintenance and environmental protection," said Chudnovsky.

The second point was to call on the government urgently to pass whistle blower legislation, which will allow for and encourage employees of CN to come forward with information that they have regarding safety concerns and maintenance concerns.

"I have spoken with dozens of CN employees over the last two years, many of them talk about the problems in Prince George but they are afraid for their job.

"We think that has to stop, they are the ones with the wisdom and experience to help and improve the situation in B.C.," said Chudnovsky.

Number three is to call on the government to compel CN in providing to the Provincial Government all of their safety and maintenance records with respect to the running of the railroad in B.C.

Fourth is to ask the government to require that CN report regularly and publicly to the people of B.C. the improvement which they are making in safety and maintenance procedures on the rail way.

"Their explanations are unacceptable to British Columbians, the situation continues to be critical," said Chudnovsky.

The last point of the plan is to call on the government to call a full public inquiry into safety, maintenance and environmental protection standards with respect to CN and CN's operation in B.C. since the sale of B.C Rail.

"We see these as concrete and practical steps to improving the safety situation with CN in the province," said Chudnovsky.

He said the province has a railway operation in B.C. that has been absolutely unacceptable over the last number of years, and a government that has been making excuses for CN.

"These are very doable points that will make CN more accountable, make information more transparent and importantly make British Columbians Railways safer," said Chudnovsky.

CN rail points to "human error" in Prince George derailment

The Transportation Safety Board has just begun their investigation, but as far as CN seems to be concerned the problem on Saturday that resulted in a train crash and derailment in Prince George was human error.

And while the latest high profile derailment may provide some added public attention to the rail road's continuing problems in BC, another story is starting to add some fuel to the fire on safety related incidents.

CKPG television reports that CN is looking into a report that claims rail workers are being pressured to boost production by increasing the number of cars being transported through the province's rail yards.

One of the other issues that seems to be percolating on the safety front, is the process of marshaling the trains in the yards, Opinion 250 was reporting this weekend that the trains in question, we're being operated by management personnel. Other reports on Saturday had it that the trains were being operated by remote control, with no engineers in the cabs of either engine at the time. The incident has been described as a runaway train and subsequent crash.

Saturday's problems took place across the Fraser River across from a major downtown park in the city. A near miss in a populated part of Northern BC that will no doubt find CN Rail under closer watch regarding its train loads and safety procedures.

Wreck on the railway

CN has a major derailment on its hands in Prince George, as two trains collided in the CN yard on the north banks of the Fraser River at around 10:30 this morning. The derailment took place in the area near South Fort George.

The Globe and Mail features the story on their website, stating that one train collided with another that had derailed in the yard, rail cars are on fire and the skies have been darkened over the city.

The Opinion 250 website, is reporting that Ministry of Forests water bombers were called out to try to prevent the fire from spreading through an adjacent park in the city. Their website includes video of the fire.

The latest derailment for the railroad comes days after they were served with papers to appear in provincial court in October to face with five counts related to environmental damage. "Two are under the federal Fisheries Act and three under the B.C. Environmental Management Act.

No injuries as trains collide in fiery crash in northern B.C.
Canadian Press
August 4, 2007 at 5:38 PM EDT

PRINCE GEORGE, B.C. — CN Rail is dealing with a wreck after two trains collided Saturday on the banks of the Fraser River in Prince George.

RCMP Constable Gary Godwin said it appears one train derailed and collided with a train on an opposing set of tracks.

Fuel is leaking into the Fraser River and thick black smoke from the diesel in one engine is blackening the skies of the city.

Const. Godwin said a lumber car on one of the trains is also burning.
Related Articles

Recent
CN Rail faces five charges in 2005 toxic spill

Three locomotives were northbound while the train with the lumber was southbound.
No one was injured in the incident.

CN spokesman Jim Feeny said the trains, one of them with three locomotives, collided in the CN yard. He could not say how many cars were involved in the wreck.

Mr. Feeny said it is not known what environmental damage may have occurred as fuel from the locomotives and a tanker car leaked onto the ground in the yard and near the river. He said crews were able to remove cars not directly involved in the blaze.

Const. Godwin said hundreds of onlookers viewed the blaze from a park on the other side of the river. That led to the park being shut due to the danger of a tanker laden with diesel exploding.
The derailment came the day after it was announced that CN Rail is facing federal and provincial charges as a result of a derailment that sent toxic chemicals into a river north of Vancouver.

Company spokeswoman Kelli Svendsen said CN was served late Thursday with five counts.
"Two are under the federal Fisheries Act and three under the B.C. Environmental Management Act.

She said the first scheduled court appearance is on Oct. 3.

The Cheakamus River's fish population was virtually wiped out by the spill of 40,000 litres of sodium hydroxide into the river, about an hour's drive north of Vancouver. It killed more than 500,000 fish from 10 different species and caused extensive environmental damage.

According to officials with the provincial Environment Ministry, CN has already been billed about $200,000 dollars for costs resulting from the initial response to the spill and the company will be on the hook for subsequent remediation and recovery costs, which may be tallied for years.

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Further links to the story:

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CBC-Water Bombers fight CN fire near Prince George

Opinion 250-CN Derailment Smoke Drifting Over Prince George

Opinion 250-CN Derailed Trains Operated By Management ?

Opinion 250-Woman Witnessed Collision of CN Trains in Prince George

Opinion 250-Water Bombers try to contain flames

Opinion 250-CN derailment in Prince George

PG Citizen-CN Rail cars derail near South Fort George

CKPG TV- CN derailment (audio)

CKPG TV- Train Derailment -Fire Dept (audio)

CKPG TV- CN Train Derailment-CN Comment (audio)

CKPG TV- CN Train Derailment (VIDEO)

CKPG TV- CN derailment

CKPG TV- Derailment Update (audio)

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(Photo above from the Opinion 250 website)

CN spending 1 Billion dollars on Western infrastructure

Business Edge magazine is running an article on its website examining the spending plans of CN Rail, as it moves to capitalize on the progress of the Fairview container port and the expansion of development in the Alberta tar sands.

Those two projects have CN telling the world that the growth for the foreseeable future is in Western Canada and to that point they plan on spending some 1 Billion dollars on equipment, facilities and other infrastructure. the bulk of which will be found in Alberta and BC.

Of interest to Rupertites will be CN's thoughts on phase two of the container port, as seen through the eyes of CN's CEO Hunter Harrison.

"Financing for the terminal's second phase, which will see the initial annual throughput capacity of 500,000 TEUs (twenty foot-equivalent containers) rise to a capability of two million TEUs per year, is already in place, said Harrison.

"There are some other hurdles, but not financing hurdles. From a financing standpoint it's a done deal," said Harrison."

The article examines the number of spin off effects of the CN investment in both BC and Alberta and how many towns and cities stand to benefit from the expansion of trade through Prince Rupert.

CN opens wallet for Western infrastructure

Prince Rupert, oilsands deliver opportunities
By Laura Severs - Business Edge

Published: 06/29/2007 - Vol. 7, No. 13

British Columbia and Alberta will play key roles as the Canadian National Railway Co. spends $1 billion on infrastructure, including new equipment and new facilities, in Western Canada.

The spending comes as CN prepares for increased opportunities arising from B.C.'s Port of Prince Rupert - North America's closest port to Asia - and Alberta's oilsands.

"For the near future, we know the growth is in Western Canada," CN president and CEO Hunter Harrison told a recent Edmonton Chamber of Commerce meeting.

Business levels are flat for CN in the U.S. and down slightly - between one and two per cent - in Eastern Canada, Harrison said. But in Western Canada, growth is up by eight per cent, year-over-year, for the period of 2007 to date compared to the same 2006 time frame.

CN, which has approximately 20,264 route-miles of track in Canada and the United States, serves ports on the Atlantic, Pacific and Gulf coasts and earned $7.7 billion in revenue last year.

This year, CN's plans are to invest nearly $350 million in track infrastructure to take advantage of growth prospects in North American trade with Asia and the boom in the West.

In Edmonton, home to CN's network centre operations and the company's western region headquarters, the railway will open the Bissell CargoFlo facility at a cost of $1.6 million later this year, providing streamlined services for the transfer of bulk liquid chemicals from rail to truck.

To be operated by CN WorldWide North America, it will handle products such as methanol, sodium hydroxide, drilling mud, ethanol and biodiesel.

In neighbouring Fort Saskatchewan, it's constructing a $32-million oil and gas distribution centre.

In B.C., CN expects the first phase of its Port of Prince Rupert container terminal to be sold out even before it opens this fall. The Port of Prince Rupert is 36 hours closer in sailing time to Shanghai than Vancouver and 68 hours closer than Los Angeles.

Financing for the terminal's second phase, which will see the initial annual throughput capacity of 500,000 TEUs (twenty foot-equivalent containers) rise to a capability of two million TEUs per year, is already in place, said Harrison.

"There are some other hurdles, but not financing hurdles. From a financing standpoint it's a done deal," said Harrison.

CN is also investing $20 million in its new Prince George distribution centre, located about 800 km east of the Port of Prince Rupert. Scheduled to open this fall and designed to handle 25,000 containers, there is also the potential for further expansion of the facility.

These moves will enable both Edmonton and Prince George to become major transportation hubs, Harrison said.

For Edmonton, it could even put the city on the same footing as Chicago - but without the gridlock CN faces there.

"The difference between Edmonton and Chicago is we can get through Edmonton and we can't get through Chicago," said Harrison.

Greg Christenson, chair of the board of directors of the Edmonton chamber, also played up the Chicago angle at the June event.

"Edmonton has an opportunity with this growth in the north and the eight-per-cent growth from the CN line in Western Canada to re-leverage that, to make Edmonton into a distribution-based city or community, much like Chicago on the Great Lakes," he said.

"Our access is through Prince Rupert to China and Asia. So we see Chicago as two things: A great commercial city with a transportation base and also a high quality of life for its residents - so that's the analogy."

For Prince George Mayor Colin Kinsley, also in attendance at the chamber function, CN's Prince George distribution centre is the just the beginning of building a key transportation centre.

"Actually it's a tremendous move forward in establishing Prince George as a transportation hub for British Columbia, and perhaps over the many coming years, as a great entry point for distributions throughout North America. It's well positioned in that it's the first major centre from the port of Prince Rupert," said Kinsley.

Prince George is also expanding its airport - it now has international status and full Canada Customs and Immigration service - and hopes that in about 18 months, the facility's runway will be upgraded so it can accommodate heavy air transport planes.

This would enable it to become a first point of entry into North America.

"The growth in that type of transportation is something in excess of seven per cent per year and Anchorage, Alaska - which is now the entry point for these heavies coming in from Asia as a first stop for fuel - is at capacity," says Kinsley. "So that opens up a huge opportunity for Prince George because it's on the same (what they call the) circle route and the difference in time is a couple of minutes, I understand."

Meanwhile, the rail opportunities - both for Prince George and Edmonton - arise out of back-haul possibilities.

"It's common knowledge that there's a lot empty containers going back to Asia because of the extreme amount of product that's coming to North America," says Kinsley.

"We now can stuff those containers with pulp. We have three very large, highly efficient pulp mills in Prince George itself - plus two more 70 miles south in Quesnel, another one north of us at Mackenzie - so those pulp products and paper products that were shipped by truck to Vancouver for access to ships will now be stuffed right in Prince George at this facility and sent to Prince Rupert."

A recently signed memorandum of understanding between Prince George, the Port of Prince Rupert and Edmonton to market this new corridor will ensure that all three parties benefit.

"Each of us will have a role to play in promoting each other's advantages for shippers, both leaving the country on back haul and coming into the country," said Kinsley.

"The discussions with (Edmonton) Mayor (Stephen) Mandel and myself are about the fact that we're not in competition with one another, we're here to complement one another and grow this transportation link. There's enough for all of us, if not more."

Port's potential promoted at aboriginal conference

Delegates to the National Aboriginal Capital Corporation Association’s, received a comprehensive briefing about the progress of the Fairview Container Port project and preview of what is coming down the line over the next seven years for the Prince Rupert waterfront.

Shaun Stevenson of the Port Corporation and Doug Hayden-Luck of Canadian National Railways, outlined the current status of the project, what is planned for the future and how aboriginal people and first nations based businesses could benefit from the transportation link to the world.

The presentation was covered by the Daily News with a full article in Wednesday's paper.

PORT BUILDING 'NON-STOP' TO 2014
By Christian Webber
The Daily News
Wednesday, June 27, 2007
Page One

Dozens of financial experts from aboriginal communities throughout Canada got to hear first-hand yesterday about the potential of Prince Rupert's developing container port.

The general managers and chair persons from aboriginal financial institutions, in town for the National Aboriginal Capital Corporation Association's (NACCA) 11th annual general meeting being hosted by Tricorp, packed the meeting room at the Crest Hotel for the opening event, a presentation about the port.

Shaun Stevenson, the vice-president of marketing and business development with the Prince Rupert Port Authority, and Doug Hayden-luck, sales director for CN Rail's International Indermodal operations spoke about the benefits of the new Fairview Container Terminal Development in Prince Rupert for aboriginal businesses.

There were 60 delegates on hand from around Canada and parts of the United States for the general meeting.

Stevenson said that right now the cruise ships coming in to Atlin Terminal are bringing in $10 million and 120,000 passengers a year.

He said among the advantages of developing the Fairview Container Terminal are its proximity to Asia, the fact that Prince Rupert has one of the deepest harbours in the world, CN Rail is on board and capable of delivering, and the fact that Prince Rupert's capacity for growth and exports is huge.

Stevenson said their strategic direction is cruise ship and industrial development and containerization.

The first phase of Fairview will cost $160 million, and it has an estimated capacity of 500,000 20-foot equivalent containers, compared to Vancouver's two million TEUs.

"Construction is progressing well and it is on time and on budget," said Stevenson.

He said the future expansion plans include phase 2, to be completed in 2011, which is hoped to have a capacity of 1.5 million TEUs and 150 more acres of space, as well as a second berth. Terminal 2 is the next phase after that, it will include a capacity of yet another two million TEUs and the port hopes it will be under way after 2011.

So far, phase one is on time to be ready for operations in October of this year. Phase 2 will be ongoing from 2009 to 2011, and Terminal 2 is expected by 2014.

"To meet Pacific Gateway's projected demands, they must work non-stop until 2014," said Stevenson.

Stevenson said the total West Coast capacity is 23 million TEUs, and British Columbia's current rate is 2.1 million, and is expected to be doubled by 2020.

"Prince Rupert is critical and optimal for operations," said Stevenson.

The export side to the port has not been talked about as much as the import potential, but is half the reason why this is happening, he said. Alaska seafood will be the main export through Prince Rupert, then pork from Manitoba and Saskatchewan.

The port exports will have a capacity of 75,000 to 100,000 TEUs. Also the new Prince George Inland Port will ship out 60,000 40-foot equivalent containers of forest products annually to Asia.

Another plus for Prince Rupert and the aboriginal community is the number of youth that will be able to work, whether as longshoremen or for the authority.

"The young population is one of the strongest assets for the Port Authority," said Stevenson.
Doug Hayden-Luck of CN pointed out that Prince Rupert is 1,000 nautical miles closer to Asia than Los Angeles, which works out to a two-day sail.

From Hong Kong, Prince Rupert is 5,286 miles, Vancouver is 5,768, Seattle is 5,777 and L.A. is 6,380.

Hayden-Luck said CN will also be able to travel faster than their competitors through to Prince George, saving them valuable time getting to places like Chicago, Memphis, Detroit, Toronto and Montreal.

CN is responsible for $30 million of investment in the project, along with the Canadian Government's $30 million, Maher Terminals' $60 million, the Port Authority's $25 million and the government of British Columbia's $30 million.

"We really believe this will be successful," said Hayden-Luck.

CN also announced that Cosco, an Asian shipping company is on board. It is supplying nine vessels with a capacity of 55,000 TEUs that Hayden-Luck said are bigger than most cruise ships that dock in Prince Rupert. With Cosco, export out of Canada will be possible to anywhere in Asia.

Exporting will be a big part of the container port because as Hayden-Luck pointed out, there is hardly any money made by the shipping boats in the Asia-to-Canada aspect.

"Carriers need to make money on both trips," said Hayden-Luck.

Since Prince Rupert does not have very much local cargo, the exports will have to come from away. The primary growth in exports will be grain and specialty wood, and that is expected to double by 2015.

Financing of Phase Two of Fairview Container port “a done deal”

Hunter Harrison CEO of CN Rail, painted a fairly positive picture for the Port of Prince Rupert and the railway’s plans for it in the future.

Speaking at an Edmonton Conference of the CN Board of Directors, Harrison explained what plans the railway had for the Edmonton area, which stands to benefit greatly from the new transportation corridor to the Asia Pacific through Prince Rupert.

But for Rupertites it would be his thoughts on the future of the port after phase one is developed that will be of the most interest.

“Financing for the $600-million second phase-- a concern for the port authority earlier this year -- is now in place, he said.”There are some other hurdles, but not financing hurdles. From a financing standpoint it’s a done deal."

CN has already stated that phase one will be sold out before the first container ship arrives, making the need for phase two and beyond a key ingredient to the development of transportation needs for the future.

Edmonton on track to future
CN chief says city can expect jobs and rail operation growth as Rupert opens
David Finlayson
The Edmonton Journal
Wednesday, June 13, 2007

EDMONTON - Edmonton will be a key link in CN's growth as Western Canada becomes the hot market area, CEO Hunter Harrison said Tuesday.

The city is perfectly positioned to become a major transportation hub as the Prince Rupert container port comes on stream and Chicago continues to be gridlocked, Harrison told the chamber of commerce.

"The difference between Edmonton and Chicago is we can get through Edmonton and we can't get through Chicago."

"So all of the growth from Prince Rupert and the return business to Prince Rupert, as well as growth in Vancouver, is going to flow through Edmonton. We're going to see job creation, capital investment and probably yard expansion." Western Canada business grew eight per cent year over year, while Eastern Canada was down a couple of points, Harrison said.

"The future is bright in Western Canada and we are spending a billion dollars on infrastructure to prepare for it."

The railway is building a $32-million Fort Saskatchewan oil and gas distribution centre, and a $1.6-million east Edmonton facility for train to truck transfer of liquid products such as methanol, biodiesel and drilling mud will open later this year, Harrison said.

The $160-million Prince Rupert first phase will be sold out before it even opens this fall, and the partners will move into phase two as quickly as possible, he added.

Financing for the $600-million second phase-- a concern for the port authority earlier this year -- is now in place, he said. "There are some other hurdles, but not financing hurdles. From a financing standpoint its a done deal."

Prince Rupert is 36 hours closer to the vital Asian markets than any other U.S. or Canadian port.

CN is also building a $20-million transload operation and intermodal rail terminal in Prince George to tap into wood and other resource-based export products in northern B.C.

Harrison also said the railway is changing its culture so it's safer for workers and communities after a series of "unfortunate" incidents in the last couple of years, including the Wabamun Lake spill. "It's not about bottom-line dollars. It's the right thing to do."

Harrison spent two days meeting with his board here this week and will receive an honorary law degree from the U of A. today.

"For someone who as a 17 year old worked in the grease pit oiling boxcars that is quite an honour," he said.

Trains back on the tracks, CN line re-opened

The CN line between Terrace and Prince Rupert has re-opened, allowing Prince Rupert to be re-connected with the rest of North America's suppliers and markets.

The Terrace Standard provided details of the CN announcement of Monday.

CN line open again
The Terrace Standard
2:40:31PM, Jun 11 2007

CN OFFICIALS confirmed that the CN line between Prince Rupert and Terrace opened this morning.

"They did an assessment and they did what was necessary to open up the lines this morning," said CN spokesperson Kelli Svedsen.

The trackbed of the CN line was wiped out due to flooding on the Skeena River on the morning on June 6, leaving businesses like Ridley Terminals and Prince Rupert Grain without an influx of product for shipping.

CN shuts down freight service between Prince Rupert and Smithers

The heavy mountain run off and rising levels of area rivers has resulted in Canadian National Railways suspending service from Smithers to Prince Rupert.

The line was shut down Monday night and CN has no anticipated time of re-opening the line, requiring some time to examine the tracks, railbed and trestles along the northern system.

From the Prince George Citizen, we found the following article on the closure.

CN Rail line closed between Smithers and Prince Rupert
(Breaking News) 3 hrs, 39 min. ago
Tuesday, June 5, 2007

By Mark Nielsen
Citizen staff

The CN Rail line between Smithers and Prince Rupert was closed down Monday night thanks to heavy spring runoff and rainfall in the area, says company spokesperson Kelli Svendsen.

"We don't have an estimate on when that line will reopen because there's several affected sections in that area," she said Tuesday.

Svendsen was unable to give further details on how the sections have been affected and on any alternate plans for moving product CN may have put in place.

"This just occurred last night," she said.

The closure means CN Rail cannot ship products from Prince George to Ridley Terminal in Prince Rupert, Svendsen confirmed. When it's open CN runs as many as eight trains a day along that corridor.

Prince George’s inland port to create fifty full time jobs to start

CN is bullish on Prince George, a 20 million dollar investment in the first avenue container yard, is expected create 50 full time jobs to start, and with more on the horizon as the container yard becomes fully utilized.

That development and an outline of CN’s plans for Northern BC were presented to a Prince George Chamber of Commerce luncheon today. At the luncheon, CN Rail's General Manager of the Mountain Division, Tom Bourgonje, shared the details of the major change to come to the Prince George economy.

In his address, Bourgonje expanded on the plans for Prince George with some 2200 feet of track to be added to the Prince George rail facility, with the designation of #98 and #99, the latter apparently dubbed the Gretzky line. The tracks will service one extra train each way, each day to start servicing the Prince Rupert container port and points east and south of Prince George.

It’s expected that the crews assigned to the container yard in Prince George will handle 60 to 70 containers a day from the downtown yard.

Opinion 250 had a full story on the latest developments in Prince George including a review of spending from CN thus far as they prepare to link their transportation network through the US and Canada all the way to the Pacific ocean.

Inland container Port on track
Opinion 250 News
Wednesday, May 16, 2007

CN Rail's General Manager of the Mountain Division, Tom Bourgonje, says the inland container port to be built at the First Avenue rail yards in Prince George will create 50 full time jobs.

That project is costing CN $20 million dollars and Bourgonje says it will be ready in time "Basically we're right on track. We've started doing all the building modifications we have to do to our buildings in the yard and we have a design that is done, we have a design in place, and we have the contracts going out and everything wil be done by our deadline of October first."

Two track lines, 2200 feet long are being added to the First Avenue yard, and that will enable the crews to handle 60 - 70 containers a day. Initially it will see one extra train each way . The train's have already been given numbers #99 ( dubbed the Gretzky) and #98.

"We are about to see a geographical shift in North America's transportation. We are going to make Prince George the centre of the world, and it is going to become a major North American corridor, there is just no doubt about it."

In his luncheon address to the Prince George Chamber of Commerce, Bourgonje praised all who worked on landing the inland intermodal port "Everyone here has done an excellent job in proving the business case to locate the inland port in Prince George, this is an incredible opportunity not only for Prince George, but for all the communities around it."

While he says the completed facility will employ 50 people, Bourgonje says that could grow " That could of course expand as things ramp up and customers see how it works, there could be an increase in demand. Right now we are focusing on the east-west corridor and Chicago and Memphis."

Bourgonje says CN is spending $1.6 billion dollars in 2007 on capital and infrastructure.
Here are some of the dollars being spent:

-- ordered 50 new locomotives,
-- purchased 1100 new platform cars ( that could be increased to 3300)
-- $350 million on the Prince Rupert Port, with terminal, tracks, new tunnels, extra sidings, and extensions to sidings between Winnipeg and Prince Rupert.
-- $20 million on Prince George container port

Bourgonje is aware customers and communities are very concerned about safety. "Simply put, it is in our best business interest to our customers, our employes and our communities to operate a safe and efficient railway."

"In 2005 we had a rash of incidents which we are not very proud of, but we developed a foucs safety action plan and we live to it to a T" Bourgonje says following that plan helped the railway reduce accidents in 2006 by 50%. "We are going to continue to be super, super focused on safety."

Bourgonje wrapped up his address saying "CN is very proud to be in your community, and we are very proud of our employees in your community."

Naming of container shipping line expected soon

Shipping industry members are anxiously awaiting a decision from CN Rail as to which shipping line will be calling on the Fairview Container Terminal upon its completion later this year.

It’s a decision that many had expected to have been announced by now, but CN apparently is playing its cards close to the vest as it seeks out the best deal for its users and the “unique opportunity” that the Rupert port presents.

The Daily News featured the background of the negotiations thus far and how they may impact on the railway and the container port.

CN RAIL SAYS SHIPPING LINE IS TO BE KNOWN SOON
As work on first phase of container port nears end, deal is likely imminent
By Leanne Ritchie
The Daily News
Tuesday, April 24, 2007
Pages one and three

CN Rail expects to announce in the very near future who will be using the new Fairview Container Terminal to ship products.

“We are on schedule to open the facility in the fourth quarter, maybe slightly earlier. Customer interest continues to be extremely strong and we are hopeful we will have an announcement there in the near future,” said Claude Mongeau, executive vice-president and chief financial officer for CN Rail.

People in the shipping industry had anticipated an announcement of an agreement with a shipping line back in December or early January.

Given that the facility is expected to open in October of this year, analysts questioned whether CN would soften its rates if it did not soon see an agreement.

“We are sitting with a unique project at a unique doorway into North America for these containers, and therefore, as I have said in the past, I think that unique opportunity should be priced appropriately,” responded Mongeau, speaking during yesterday’s first-quarter results conference call.

“I think that is recognized by the steamship community and their customers and we will be having some announcements in the near future on that.”

Construction of the new facility is actually ahead of schedule, noted company officials.

The Fairview Container Terminal is a joint venture between CN Rail, Maher Terminals and the Port of Prince Rupert. Maher Terminals will operate the $170 million facility that will be able to move 500,000 (TEUs) average-sized containers from ship to rail each year.
While the investment industry has been waiting for the announcement of a shipping agreement, both Maher Terminals and CN Rail have had a busy first quarter.

In March, Maher Terminals announced it is being purchased by RREEF Infrastructure, a division of Deutsche Bank’s Asset Management division.

And since January, CN’s shipments have been slowed by bad weather and the company has been suffering ongoing labour action.

Just prior to the conference call, the federal government announced the appointment of a mediator to solve the rail line’s dispute.

In February, the harbour in Prince Rupert was full of grain tankers waiting to load after bad weather and the labour action slowed grain shipments.

Speaking from New Brunswick, Hunter Harrison, CN Rail’s president and CEO, said it has been the most challenging quarter in his 40 year experience.

“I’ve got a big smile on my face, there’s no mud slides, no avalanches, no rain, no high winds, no labour strikes, no lockouts, life is goods,” said Harrison.

“It’s as good a performance as I have ever seen, given what we have had to deal with.”

CN’s first-quarter profits were $324 million, 10 per cent below its year ago earnings, because severe winter weather, hampered operations in a “challenging” period.

“Our results for the quarter were affected by unusually difficult winter weather in Western Canada during January and February, a work stoppage by conductors and yard-service employees across Canada in February and then avalanches and landslides in Western Canada that blocked out the main line to and from Vancouver in March,” said Harrison.

The major rail carrier said its earnings amounted to 63 cents per share diluted, compared with net earnings of $362 million or 62 cents per share in the same quarter of fiscal 2006.

A strike by conductors and yard service employees cost the company $35 million in profit, or about seven cents per diluted share, said CN Rail which reported its results after the close of financial markets.

Revenues for the three months that ended March 31 were essentially unchanged at $1.9 billion.

Locked out employees began returning to work last Thursday after the federal government passed back-to-work legislation, ending CN’s lockout as well as the workers’ strike action.

The railway left its second-quarter dividend unchanged at 21 cents per share. Its shares closed down 45 cents at $55.85 in Monday trading on the Toronto Stock Exchange.

Labour woes work in Rupert’s favour

Two separate sets of labour difficulties are making the Port of Prince Rupert a desired location to send product these days.

The recent CN strike and a retaliatory lock out of Vancouver based rail workers, is combining with a potential strike at CP Rail to drive more business towards athe northwest and the Port of Prince Rupert.

Add in the fact that the CN dispute has resulted in a perceived congestion problem at the Port of Vancouver (one the Port there is struggling to explain as non existent) and suddenly the Port of Prince Rupert is a destination for shippers looking to move their product as expeditiously as possible.

The Vancouver Sun had an interesting look at how the Northwest corridor is finally starting to get the message across that it’s a reliable, quick and hassle free way to get product to consumers.

Rupert stands to gain from labour strife
Railway work stoppages mean northern port starting to see more work
Fiona Anderson
Vancouver Sun
Wednesday, April 25, 2007

The Port of Prince Rupert may be the ultimate beneficiaries of work stoppages like the recent CN Rail strike-turned-lockout and a threatened strike of maintenance workers at Canadian Pacific Railway Ltd.

Legislation ordered CN Rail conductors and yard workers back on the job on Thursday. But Prince Rupert was "happily" unaffected by the job action which lasted just over a week, said Greg Slocombe, president and chief operating officer of Ridley Terminals Inc. in Prince Rupert.

The United Transportation Union initiated what were to be rotating strikes on April 10 after almost 80 per cent of their members who voted rejected a tentative agreement with the Canadian National Railway Co. CN then retaliated by locking out the employees who had gone on strike.

"Fortunately for us [the UTU] started its rotating strikes where there would be highest impact and that's Vancouver," Slocombe said. "So they locked them out down there. But we've not seen any job action up here at all so therefore there's not been lockouts."

And as CP doesn't have a rail line to Prince Rupert, a threatened strike by the 3,000 maintenance-of-way employees represented by the Teamsters Canada Rail Conference will also have no negative effect.

And in fact, both work stoppages could actually benefit the northern port.

"In a back-handed way, because they've had some challenges in Vancouver, not necessarily just strike-related but congestion related [as well], that's actually playing into our hands," Slocombe said. "It's starting to throw more business our way."

Ridley, which is a bulk coal terminal, expects its shipments to at least double this year, partly due to increased production in northeastern British Columbia, and partly due to congestion in Vancouver-area ports.

Jeff Burghardt, president of Prince Rupert Grain Ltd., which handles wheat, durum, barley and canola, said his company didn't notice any increase in shipments due specifically to the CN dispute. But Burghardt is finding more and more customers want to do business out of Prince Rupert.

"I think there has been a gradual recognition that the northwest corridor [through] Prince Rupert can deliver superior service and people are certainly recognizing the value of more reliable delivery times," Burghardt said. "And that's helping us."

Total grain shipments from the West Coast is expected to be 16 to 17 million tonnes this year, up from a five-year average of 13 million tonnes.
"A lot of that incremental business is finding its way exclusively to Prince Rupert," Burghardt said.

Denis Horgan, vice-president and general manager of Westshore Terminals, which handles coal in the Lower Mainland, said that since January the terminal has lost two or three ships to Ridley in Prince Rupert.

A number of factors contributed, including the CN lockout and bad weather. But CN has been promoting Ridley "as a less-congested option," Horgan said. The congestion is on the railroad, not at the terminal, which last year moved 19 million tonnes of coal but has capacity for 24 million tonnes increasing to 29 million tonnes, Horgan said.

"There's no congestion here. We've lots of capacity. But certainly for whatever reason CN would seem to prefer the Ridley gateway over the Vancouver gateway for coal because of congestion or perceived congestion in the Vancouver rail corridor," he said.

"We're not congested or over capacity," he added. "We'd certainly like to be, but we're not."
Scott Galloway, director of trade development at the Vancouver Port Authority agreed that capacity was not the issue.

The port only looks at numbers annually, so Galloway couldn't say if there have been any shifts away from Vancouver to Prince Rupert so far this year. But last year, the port set a record for tonnage, he said.

"And I would still argue that there is a lot of capacity left on the bulk side and the container side," Galloway said.

Railway police to keep eye on local crossings and yards

CN Police will be out in force across Canada and the USA this week in a safety blitz designed to emphasize the risks involved in travel near rail lines. Part of Rail Safety Week, the railway’s police officers will be watching local crossing areas to ensure that residents understand the dangers that can come when trains, cars and people mix.

This issue is a particularly controversial one in Prince Rupert, as the largest stretch of waterfront land borders along a large CN Rail siding close to the downtown area. From Seafest activities to people looking for a stretch of road to walk or run, the rail lines and people seem to intersect more here, than in most Canadian cities.

With a waterfront park in the east and the main walkway to Moresby Park traveling along the CN lines to the west, the need to cross the railway occurs at a couple of locations. In the past it has led to a number of bad feelings between the CN Police and local residents, each of whom interpret right of travel in different ways.

The Daily News presented CN’s briefing on what the safety blitz means for Prince Rupert with a story in Monday’s paper.

‘DON’T LET SHORTCUT CUT YOUR LIFE SHORT’ SAYS CN
By Leanne Ritchie

The Daily News

Monday, April 23, 2007

Pages one and three

Given that CN expects to see four added trains moving to and from Prince Rupert when the Fairview Container Terminal opens in October, the rail company is hoping people will understand the importance of rail safety.

“There will be an increase in traffic once the port opens and it’s important, very important for people to be cognizant of rail crossings,” said Kelli Svendsen, CN Rail spokesperson.

CN will be emphasizing the deadly risks of trespassing on railway property across Canada and the United States for the next seven days, Rail Safety Week.

CN Police officers will be out in force this week, conducting their annual safety blitz operations at highway crossings in about 100 locations across Canada and the US, alerting motorists to the importance of safety at crossings and to the dire consequences of trespassing on railway property.

Svendsen noted that while crossing related fatalities have dropped, the number of deaths and serious injuries for people trespassing on rail property remains high.

“Trespassing on railway tracks and in rail yards is dangerous and illegal and CN Police officers strictly enforce regulations by issuing tickets to trespassers.

“However, railway properties are extremely large and spread out and it is very difficult to stop trespassing. Enforcement is not enough – education can help reduce fatalities,” said CN police Chief Serge Meloche. “This is why we are increasing our efforts to inform people of the very serious risks they take when trespassing.”

Trespassing includes walking, playing or running on or beside railway tracks, driving a bike, a car, an ATV, a snowmobile or any other vehicle on or beside railway tracks; taking a shortcut across railway tracks or railway property or entering railway yards at any time.

Some incidents of concern involving rail trespassing in Prince Rupert and Port Edward, as noted in letters to the editor by Dave Walker, include young people climbing on or under parked rail cars down by the Prince Rupert waterfront, while trains are coming to or from the Via Rail station and a person who approached the tracks at the North Pacific Cannery while a train was moving through the area.

In both instances tragedy was narrowly averted, but they are vivid reminders not to trespass on railway property and rail cars.

Recent statistics reveal that trespassing incidents claimed 58 lives in Canada in 2006, remaining at a constant yearly average during the past decade, while fatalities due to crossing collisions were down to 28, reflecting a steady improvement during the same period.

Statistics also show that in 2006, 93 per cent of trespassing incidents resulted in death or serious injuries (63 per cent fatalities and 30 per cent serious injuries.)

Every year, CN does outreach in different communities across North America. In the Northwest, this year’s event will take place in Terrace on Kenny Street and Highway 16 on Thursday from 10 a. m. until noon.

“Our message is quite clear: Don’t put yourself at risk by trespassing on railway property. In other words, don’t let a shortcut cut your life short. Acting responsibly and safely is the right thing to do and it is everyone’s responsibility, said Meloche.