(The Canadian Press circulated the following article by Alan Swift on April 19.)
MONTREAL — Canadian National Railway Co. is investing $100 million (U.S.) to rebuild and upgrade its major train yard in Memphis to cope with growing freight traffic to and from the southern United States and Gulf of Mexico.
The reconfigured yard will have capacity for more than 3,100 freight cars when it is finished in 2008, compared with 2,800 today, CN said Wednesday, and will be able to handle 35 or more freight trains a day, compared with a current maximum of 25 to 30.
Traffic going through Memphis will even include containers from the new Pacific port terminal under construction at Prince Rupert, B.C., to open next year to handle containers from China.
CEO Hunter Harrison said in a release the yard has handled steadily increasing traffic volumes since CN’s acquisition of Illinois Central in 1999, and the recent implementation of routing protocols with the other major railroads in Memphis.
“This sizable investment will position Johnston Yard to handle existing and future traffic growth in the region, quickly and efficiently.”
Johnston Yard, constructed in the early 1900s, occupies about 140 hectares of land, after CN recently acquired an additional 35 additional hectares to expand the site.
The reconfigured yard will have 45 tracks in the classification yard, three 3,000-metre departure tracks and eight 1,500-metre receiving tracks, the company said.
The project will include new tracks, switches, support buildings, equipment, a new yard tower, car shop and locomotive servicing site.
Memphis is a major freight distribution hub, and acts as a gateway to CN’s rail operations in the Gulf of Mexico region, noted spokesman Mark Hallman.
The city is also the largest U.S. location outside of Chicago where CN interchanges traffic with four of the major U.S. Class 1 railroads — CSX Transportation, Norfolk Southern, Union Pacific and Burlington Northern Santa Fe.
Hallman described the investment as “a significant engineering project” but said it is intended to be accomplished without affecting the fluidity of the yard. CN will do the work itself.
He said the project reflects the fact that CN is moving more and more traffic to and from the Midwest and across the Canada-U.S. border.
“We anticipate too that with our new intermodal terminal opening up next year at Prince Rupert, Memphis will be a key destination point for Asian goods coming over the Port of Prince Rupert,” Hallman said.
Currently, 34 per cent of CN’s revenue comes from cross-border traffic; 23 per cent domestic U.S., 23 per cent domestic Canadian, 14 per cent offshore on the West Coast, four per cent offshore east and two per cent offshore through the Gulf of Mexico.
The investment follows the opening in August 2005 of a new $35-million US intermodal terminal in Memphis, in partnership with CSX.
The Montreal-based company will hold its annual meeting in Memphis on Friday.
CN shares were off 75 cents Cdn Wednesday at $54.11 on the Toronto Stock Exchange.