(The following story by John D. Boyd appeared on The Journal of Commerce website on October 8, 2010.)
WASHINGTON, D.C. — Canadian National Railway said it is adding railcars and taking other steps to meet supply chain needs of steel producing customers in Canada, the second time in a week that CN has unveiled new efforts for major customer groups.
On Sept. 28, CN had said it was implementing new metrics to better track production and shipping needs between Canadian coal mines and ocean vessel arrivals at the country’s West Coast export terminals.
That coal business is being driven by a rebound in Asia’s steel output, and the need for high-heat Canadian coal to fuel steel furnaces overseas, a development behind a new contract for rival Canadian Pacific with one of its largest shippers.
Now, CN said it is adding to its gondola railcar supply and altering its car staging strategy to “better meet short-term car order requirements of major steel producers in Canada and help them to compete more effectively in their markets,” and boost its service to the broader North American steel supply industry.
It has created car staging areas near producer facilities to more quickly respond to developing spot needs, CN said, with one at Sorel-Tracy, Quebec, northeast of Montreal, and another at Paris, Ontario, west of Hamilton.
CN is also acquiring 200 standard gondolas and 200 open coil gondolas “to expand and improve the quality” of its car fleet serving the North American steel industry. That added equipment follows almost 700 railcars it brought in during 2009 and 2010 to haul pelletized iron ore in the Upper Midwest.
The railroad’s announcement included a statement by Yasushi Tago, president of Sumitomo Canada, who said he was “pleased to see CN’s investment in end-to-end transportation solutions and the company’s commitment to meeting the needs of our business. A reliable, efficient transportation system is vital to the success and growth of our business during this economic recovery.”
“CN wants to expand its steel business. With an end-to-end supply chain focus and new equipment, we aim to help our steel customers grow and capture an increasing share of their new business,” said Jean-Jacques Ruest, CN executive vice-president and chief marketing officer.
Already, said Ruest, “CN’s network reaches the vast majority of major Canadian and U.S. hot-rolled steel production capacity and features an extensive network of strategically located transloading facilities. We also play a critical role in the raw materials supply chain of the steel industry through our transportation of iron ore.”