C.N. president cites I.C. merger benefits for U.S., Canada grain

by Teresa Acklin
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   North American grain producers stand to gain new transportation choices and efficiencies from the proposed merger of Canadian National Railway Co. and Illinois Central Corp., according to Paul M. Tellier, president and chief executive officer of C.N.

   In a Sept. 18 address to the National Grain Trade Council and North American Export Grain Association in Santa Fe, Mr. Tellier said the C.N./I.C. merger, and C.N.'s new marketing alliance with the Illinois Central and Kansas City Southern Railway Co., would promote competition, create more transportation capacity, improve the logistics of north-south rail traffic and increase the reach of rail shippers.

   The C.N./I.C. merger, Mr. Tellier noted, will connect the Atlantic, Pacific and U.S. Gulf coasts with a single “Y-shaped” network.

   The C.N./I.C./K.C.S. marketing alliance, he added, offers shippers coordinated, through-train service between Canada, the Midwest and the South, and a connection to Mexico's largest rail system.

   Mr. Tellier said C.N. wants to find innovative ways to take advantage of the grain car fleets of both the C.N. and the I.C. and to use them strategically to improve availability. “The merger should help us to find ways to smooth out the peaks and valleys in grain traffic on a continent-wide basis,” he said.

   Cargill, Inc.; ConAgra, Inc.; and the Canadian Wheat Board are among grain and grain product interests voicing support for the C.N./I.C. merger, Mr. Tellier told the Santa Fe meeting.

   The C.N., Mr. Tellier said, will adopt successful I.C. grain transportation practices, including “super trains” — in which customers can lock in a set number of train movements over a period of time and ensure the railroad has the needed capacity. “To the extent that we can do so under Canadian regulations, we are looking at the possibility of applying the same operating system in Canada to move Canadian products,” Mr. Tellier said.

   The Surface Transportation Board is scheduled to vote on the Canadian National/Illinois Central merger plan next March.