(The Canadian Press circulated the following article by Alan Swift on April 21.)
MONTREAL — Canadian National Railway Co. is looking to acquire more small railways in Canada and the United States, its chief executive said Thursday.
Hunter Harrison said it is unlikely there would be a transaction with one of the few large Class 1 railways, but the company is looking at smaller opportunities like its acquisition of BC Rail last year.
“There are still small railroad opportunities, regional rails, shortlines, some switching carriers that we’d have an interest in if they were for sale at the right price,” Harrison said after the company’s annual meeting.
He said he’s particularly interested in railways that hand off cars to CN, and those that are under financial pressure.
“If they’re having problems, that impacts us too.”
The CEO said this is just one way the Montreal-based continental railway (TSX:CNR) plans to continue the growth of the past decade, since the former Crown corporation was privatized and issued its first shares in 1995.
Despite the overwhelming dominance of CN Rail and Canadian Pacific Railway (TSX:CP) of Calgary, the Railway Association of Canada has some 57 members, including small freight railways that took over track sold or abandoned by CN and CP as unprofitable.
Harrison said CN can continue to grow freight volumes, gain market share from trucks, and is looking for a big impact from a new container terminal at the port of Prince Rupert, B.C., to which CN has the only rail connection.
The federal and B.C. governments announced last week they were each contributing $30 million to help build Prince Rupert’s first terminal to be able to handle containers.
CN agreed this week to increase its contribution to the terminal to $30 million, not counting the $125 million it plans to spend for new rolling stock.