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Canadian National Railway: Closing in on a century of progress

Canadian National Railway: Closing in on a century of progress

The name Canadian National Railway may conjure up images of trains bringing passengers and cargo across Canada’s immense plains, but the company is far more than that. For one, while the company remains proudly Canadian, it operates across all of North America. And secondly, Canada National Railway (or “CN” as it is more commonly referred to) is more of an integrated logistics company than its name suggests, taking in warehousing and distribution centers, trucking and freight forwarding.

Having been founded in 1918, the company will soon celebrate its 100th birthday in an historically strong position, but it wasn’t always thus; until its privatization in 1995, the company was considered something of a laggard in the railway industry, generating huge annual losses and generally being a byword for inefficiency. That’s all changed. In 2011, for example, the company’s largest shareholder was none other than Bill Gates, the world’s some time richest man, and fittingly, author of “Business at the speed of thought.”

A series of acquisitions since its privatization in 1995 have contributed to CN’s impressive statistics; at a time when when globalization is considered the norm, it remains the only transcontinental rail network in North America. The company employed over 23,000 people in Canada and the US at year end 2015, and has approximately 19,600 route-miles of track in North America, carrying around $250 billion of goods every year and offering rail connections to 3 coasts. Its 2016 revenues were C$12.037 billion, with net income of C$3.64 billion.

Getting back on track

Reaching its current position as ‘North America’s Railroad’ as its motto states, wasn’t merely a case of acquiring several industry peers. Management at CN put in place a set of priorities, which drive how business is conducted every day, supporting its commitment to be the best in its industry. These priorities are: operational and service excellence, creating value for shareholders, creating value for customers, delivering safety and responsibility, and playing its role as a backbone of the Canadian economy.

The company maintains a set of detailed measurements, which it calls Precision Railroading, in each of the priorities to ensure that it is on a trajactory of continuous imporvement. On the customer side, it provides 24-hour a day information on the status of their order, and has established a set of user-friendly onine tools for anyone to interact quickly and easily with the firm. Best of all, because CN operates a railway and truck network, there is no need for a delivery to ever be passed to a third party, ensuring that the company has total accountability to the customer.

On Sustainable Tracks

Canada is a country which is blessed with a plethora of industry-leading companies. Therefore, the fact that CN is consistently recognized as one of its best 50 corporate citizens tells you much about the company’s commitment to sustainability. The railroad industry is not one which has traditioanlly been associated with stellar treatment of its employees, instead it often depended on unions in the past to find an accord between companies and their employees. This isn’t the case at CN, where its duty as a corporate citizen extends from potetial employees right through to its existing 23,000-strong workforce.

CN constantly seeks to engage and develop the next generation of railroaders, offering a wide variety of programs and opportunities that foster growth. Its initiatives in this area include the CN Campus, a $55 million investment in two state-of-the-art training facilities in Winnipeg and Homewod; training and educational financial assistance being made available to all of its workforce; the CN Ambassador program, where employees are encouraged to bring others into the company, and the firm’s Share Ownership program, where employees benefit from a financial state in the firm’s success. The firm also embraces diversity in the workforce, with close to 40% of its new workforce in 2014 voluntarily self-declaring as being members of a minority.

Finally, it is generally acknowledged across the board that railways offer the best opportunity we have in the long-term for sustainable transport and cargo. For example, rail transport emits anywhere between 4 and 6 times less greenhouse gas emissions than trucks. In its own industry, CN seeks to be the best-in-class, significantly reducing its own emissions to the point where it is consuming close to 15% less fuel per gross ton mile than the industry average.

Suppliers

CN’s carefully selects the partners which heed the priorities previously outlined. For example, the health of its workforce is covered by Comprehensive Health Services, one of the most experienced workforce medical services in the US, with over 40 years of practice. On the technical side, CN calls on Esco Rail which help it with carriages and other rail technology, Amsted Rail, which have provided it with many of the management devices on its tracks and GE manufacturing services which assist in repairs and mainteance. Finally, it calls on Aecon, the large Canadian construction conglomerate for maintenance and construction work across CN’s considerable and growing portfolio of assets.

The Future is Rail

On January 18th 2017, a specialized cargo train from China arrived in London for the very first time. The event went largely unnoticed, but it has the potential to dramatically change the world for the better: the gradual movement away from cargo ships to railroads will bring about enormous

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