CN and Union Pacific Reach Routing Protocol Agreement to Expedite Interchange Traffic.

MONTREAL & OMAHA, Neb. -- CN (NYSE:CNI) (TSX:CNR) and Union Pacific Railroad (UP) (NYSE:UNP) announced today that they have reached a routing protocol agreement to streamline their exchange of rail traffic at major gateways. The agreement will help to reduce rail congestion at Chicago.

Under the protocol, CN and UP have established a structured plan to direct rail traffic flows through the most efficient interchange locations, a change that will improve transit times and asset utilization for the customers of CN and UP. The new routing protocol will be implemented over a three-month period.

James Foote, CN's executive vice-president, sales and marketing, said: "With the significant amount of North American rail freight travelling over more than one carrier, we work continually with our rail partners to find new and innovative ways to improve customer service and rail efficiency. We firmly believe this routing protocol with UP will help to expedite shipments, generate more system capacity, improve equipment cycles and help to control costs."

Jack Koraleski, UP's executive vice-president - marketing and sales, said: "It is very important that Union Pacific move freight across the continent as seamlessly as possible. This agreement with CN will help to improve traffic flows and network fluidity, permit better planning, and increase our ability to make the best use of our system."

The major interchange points for traffic moving between CN and UP are Superior, Wis., Chicago, Salem, Ill., Memphis, Baton Rouge, La., and, via Burlington Northern Santa Fe, Vancouver, B.C.

The routing protocol will result in a number of changes in traffic patterns:

- Rail traffic moving between Western Canada and Texas will now be consolidated and interchanged at Superior, avoiding the Chicago terminal and reducing handlings en route;

- Wisconsin traffic between Texas and Arkansas will move in a new run-through service to Salem in southern Illinois, rather than being interchanged at Chicago, and

- Traffic moving between eastern Canada and the south-central United States will be interchanged at Memphis, avoiding congestion in Chicago.

Canadian National Railway Company spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.

Union Pacific Corporation owns one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, is the largest railroad in North America, covering 23 states across the western two-thirds of the United States. A strong focus on quality and a strategically advantageous route structure enable the company to serve customers in critical and fast growing markets. It is a leading carrier of low-sulfur coal used in electrical power generation and has broad coverage of the large chemical-producing areas along the Gulf Coast. With competitive long-haul routes between all major West Coast ports and eastern gateways, and as the only railroad to serve all six major gateways to Mexico, Union Pacific has the premier rail franchise in North America.