$48 Million CPR Investment in Expressway Partnership With Truckers.

MONTREAL--(BUSINESS WIRE)--May 27, 1999--

The Canadian Pacific Railway (CPR) will bring into full revenue service its new short-haul intermodal freight system that it has been testing for more than two years in the Montreal-Toronto corridor.

It has invested $48 million to expand this innovative service into one of the company's first priority growth initiatives. New railway equipment combined with the construction of three new terminals will allow for the introduction of full revenue service between Montreal and Toronto and its extension to Detroit by the end of the year.

"The concept of a high-technology trailer-on-train service has proven itself during the pilot project and we are very excited about future development possibilities, including service to Chicago as well as the Northeastern United States," said Jacques Cote, President of the CPR's eastern network, the St. Lawrence & Hudson Railway (StL&H).

"Unlike any other, this service is a unique partnership with truckers who will continue to serve their customers," said Mr. Cote. "We're the first to offer trucking companies, a modern alternative to highway congestion that doesn't involve modified trailers or having to go to complex and highly specialized intermodal terminals., Other railways must compete directly against the trucking industry, forcing customers to use railway-owned heavy specialized trailers."

More than two years of successful commercial trials in the Toronto-Montreal freight corridor, using Iron Highway equipment, has enabled CPR to commit itself to this innovative concept.

To be named Expressway when new equipment and terminals are operational, the service is designed to work in partnership, rather than in competition, with truck operators., It reduces truckers' fuel and tractor investment costs, is an effective way to deal with driver shortages by reducing the need for unpopular over-night runs, and allows big highway trailers to avoid crowded roads. It supports the dock-to-dock trucking industry with:

-- scheduled, fast train runs that approximate truck transit times 

between cities;

-- 15-minute terminal turn-around times for drivers picking up and

delivering trailers;

-- the ability to carry highway trailer bodies as they are, without

heavy and expensive reinforcement.

Using 240 new platforms produced by National Steel Car in Hamilton, Ont., Expressway will soon boast enough railway equipment to provide a total of 60 trailer slots in each of four specially designed trains., This is triple the load capacity of the test project., There will be two 60-trailer trains each day in each direction.

A new terminal west of Greater Toronto in Milton will be opened this summer. Another new terminal will subsequently open in Montreal, with a third slated for Detroit by the end of the year.

The Toronto and Montreal centres will replace existing facilities while the opening of the Detroit terminal will mark extension of the service west of Toronto for the first time.

Truckers can make reservations for the next available train departure by phone, fax or the Internet, with terminal check-in via hand-held computers like the ones used at some airport car-rental lots.

The trailer-on-train service made its first appearance on StL&H, tracks between Montreal and Toronto in 1996 in a test to determine financial, commercial and operational viability.

CPR decided to continue and expand it after truck carriers participating in the pilot project accepted it as an effective alternative for intercity road hauls in corridors where railways had not previously been contenders for time-sensitive shipments. The 24 train departures each week between Toronto and Montreal have attained an on-time performance average of 95 per cent.

Calgary-based CPR, a wholly owned subsidiary of Canadian Pacific Limited, provides rail transportation over a 24,600 km (15,300 miles) network reaching most of the principal centres of Canada, as well as the U.S. Midwest and Northeast. CPR has assets of $8.4 billion, annual revenues of approximately $3.5 billion and 19,900 employees in Canada, the U.S. and overseas. The CPR Website address is www.cpr.ca.