Canadian National's Guaranteed Empty Equipment Supply Program to Cover Full Freight-Car Fleet by Fall.

Business Editors

MONTREAL--(BUSINESS WIRE)--Sept. 20, 2001

Canadian National (NYSE:CNI) (TSE:CNR.) is on track to extend its highly successful guaranteed empty equipment supply program to all CN-controlled freight cars by November 2001.

To date about 70 per cent of the CN fleet targeted for the program (excluding bulk commodity car fleets and customer assigned pool cars) is covered by empty car supply guarantees. CN is in talks with its short-line partners to extend the program to off-line customers' sidings.

CN is also expanding the scope of its electronic capabilities to permit shippers to order and track empty freight cars under the guarantee program via CN's web site, www.cn.ca. Shippers can already track loaded cars, obtain estimated times of arrivals, calculate transit times and view and pay freight bills on CN's Internet site. Shippers can register for the car order/tracking service at www.cn.ca/register, or obtain general information at [e-mail].

The guaranteed empty equipment supply program, first introduced in July 2000, represents a fundamental change in how CN does business with its customers. Car orders are commitments, not forecasts, as was the case in past. Today CN guarantees delivery of empty freight cars on specified "want" dates - dates agreed to with the shipper - in exchange for the shipper's commitment to accept the cars on those dates. The program is backed up by financial penalties for whichever party fails to fulfill its commitment.

E. Hunter Harrison, CN's executive vice-president and chief operating officer, said: "CN's guaranteed car supply program enables our customers to anticipate car supply with confidence, and that means they can manage their inventory and supply chain costs more effectively. It also gives them transportation options - customers know in advance whether requested cars will be available, given the first-come, first-served nature of the program. If they're not, a shipper can opt to accept alternate cars or defer the delivery date. All this helps squeeze waste from the freight distribution system.

"For CN, the program has stabilized customers' order patterns, and reduced short-term car orders and speculative over-ordering of cars. With firm car orders, we now have a more solid picture of customer demand, and that permits us to do more long-term car planning and to make better use of our assets."

The program works well - CN has consistently provided between 94 per cent and 99 per cent of guaranteed cars on the shipper's "want" date since the program began last summer.

The program now applies to center-beam flat cars and coil gondolas in Canada and the United States. In Canada it covers double door boxcars, bulkhead flat cars, single-door boxcars, bulkhead boxcars and standard flat cars.

This fall CN will expand the program in Canada to grain boxcars, paper/paperboard boxes and miscellaneous car groups. In the U.S. it will apply to flat cars, boxcars and miscellaneous car groups.

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, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.