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9/25/2001



Rail News: Rail Industry Trends

CN's guaranteed empty-car program to encompass the Class I's fleet by mid-fall


Canadian National Railway Co. Sept. 20 announced plans to finish rolling out its guaranteed empty equipment supply program to all CN-controlled rail cars by November.
So far, 70 percent of CN's fleet that's targeted for the program (excluding bulk commodity and customer-assigned pool cars) is covered by empty-car supply guarantees.

CN is negotiating with various short lines to possibly extend the program — introduced in July 2000 — to off-line customers' sidings.

The railroad plans to expand its Web site's features to enable shippers to order and track empty cars under the program; shippers currently can register for the car-order/tracking service at www.cn.ca/register, or obtain service information by email at carorder@cn.ca.

Under the empty equipment program, CN treats car orders as commitments — not forecasts as the railroad has done in the past. CN guarantees empty car delivery based on shipper "want" dates in exchange for shippers' commitment to accept cars on those dates; whichever party fails to fulfill the commitment pays certain penalties.

"[The] program enables our customers to anticipate car supply with confidence, and that means they can manage their inventory and supply-chain costs more effectively," said E. Hunter Harrison, CN executive vice president and chief operating officer, in a prepared statement, adding that the first-come, first-served nature of the program and shippers' ability to accept alternate cars or defer a delivery date helps squeeze waste from CN's freight distribution system.

To date, CN has provided between 94 percent and 99 percent of guaranteed cars on shippers' want dates. The program currently applies to centerbeam flat cars and coil gondolas in Canada and the United States; double- and single-door and bulkhead box cars, and standard flat cars in Canada.

CN plans by November to expand the program to grain and paper/paperboard box cars, and miscellaneous car groups in Canada; flat cars, box cars and miscellaneous car groups in the United States.


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