HALIFAX, N.S. — Security concerns in the wake of Sept. 11 should not be allowed to derail Canadian National Railway’s profitable trans-border business, says Paul Tellier, president and chief executive, according to the National Post.
At CN’s annual meeting yesterday, Mr. Tellier said company executives have devoted much time over the last seven months lobbying authorities in Ottawa and Washington to keep cargo flowing at Canadian ports and at U.S.-Canada border crossings.
Truckers have experienced long delays at borders since September, and cargo inspections are increasing at ports. Mr. Tellier said he supports the added vigilance, but warns it must take place in a way that doesn’t harm transportation.
“One of our biggest challenges” is making sure the firm doesn’t face the kind of problems many of the truckers have, he said.
CN made $1.04-billion in profit last year — the largest in its history, and up from $937-million in 2000 — partly thanks to new efficiencies in moving trains, on schedule, into the United States.
Last year, the company ran about 400 rail cars into the United States every day, many of them on tracks of newly acquired regional railroads, such as Wisconsin Central, which together give CN access to customers from the Great Lakes to the Gulf of Mexico.
CN’s third-highest revenue source last year was intermodal business –the transport of containers to and from ships at Canadian ports — and Mr. Tellier is anxious to ensure that heightened port security does not impede this traffic.
Mr. Tellier said he was pleased U.S. customs agents have been stationed at major ports such as Halifax, where they will assist Canada Customs. He said the best way to maintain a free-flowing border is for officials to inspect and authorize freight cars before they reach the border. “What we are trying to do is get clearance [of cars] away from the border,” he said. “For instance, when a train is filled with containers in Halifax and is going to Chicago or south, if it can be cleared in Halifax, then that train should go straight through.”
As Mr. Tellier was speaking, measures were being announced in the United States to free up truck delays at the border.
It was an upbeat annual meeting, where executives basked in the glow of a CN share price that rose 73% last year.
CN announced it has awarded a major contract to General Motors Corp. to rebuild engines for roughly a third of its diesel locomotives.
Meanwhile, Mr. Tellier, who in January predicted the company would achieve 5% to 10% earnings per share growth this year, sounded more cautious yesterday.
“In the first quarter we did not bad at all, except for grain, but forthe remainder of the year we are not expecting any kind of large growth.”
The company’s first-quarter results will be released next week.