Subscribe to our free, weekly email newsletter!

CN announces plan to acquire new freight cars and containers

By Jeff Berman, Group News Editor
September 13, 2012

Earlier this month, Class I railroad carrier CN rolled out plans to increase its assets by acquiring more than 2,200 new freight cars this year and 1,300 new containers. Company officials said the impetus for this is to support traffic growth and improve service.

Included in these asset acquisitions, said CN, are 600 premium 60-foot double-door box higher payload cars for forest products and metals traffic, which the carrier says augment customer loading efficiency.

Other 2012 fleet additions by CN are comprised of:
-1,300 containers for grocery and consumer goods;
-558 high-capacity modern covered hoppers for grain exports;
-317 multi-level cars for finished vehicles deliveries to major cities;
-300 gondolas for coal exports;
-232 new ore cars for pelletized iron ore produced in Minnesota to supply steel mills in the United States; and
-200 multi-purpose box cars for the North American freight car pool

“CN is acquiring new freight cars and containers for a range of markets, including forest products, metals, minerals, coal, iron ore, steel, consumer goods, finished vehicles, and grain,” said Jean-Jacques Ruest, CN executive vice-president and chief marketing officer, in a statement. “These fleet additions will help us grow in line with our customers’ demands and ensure CN has the right mix of modern, productive assets. “CN’s rolling stock acquisition strategy is responding to evolving market conditions and is intended to ensure reliable, predictable supply chains for our customers.”

This announcement comes at a time when all Class I carriers continue to reinvest their capital into equipment and rail and infrastructure improvements.

Earlier this year, the Association of American Railroads (AAR) said that the seven North America-based Class I freight railroads are on track to invest a record $13 billion in capital expenditures for 2012, with the capital going towards expanding, upgrading, and enhancing the North American freight rail network.

While this asset upgrade is significant for CN, a railroad equipment expert told LM that it is more contingent on car type, coupled with the fact that each Class I railroad carrier follows their own lead—in terms of equipment needs—regardless of what its competitors do.

“One thing about CN is that a lot of their traffic flows do not fit as easily into the TTX car supply model as it does for the US Class I’s,” said Richard J. Kloster, senior consultant for freight transportation consultancy FTR Associates. “So for some car types CN is forced to blaze their path.”

Regarding box cars, Kloster explained that the only real buyers of box cars over the last 5 years or more have been TTX and CN. The US Class I’s, he said, have pushed their new car needs to TTX while CN has been going it alone for strategic reasons.

“We see box car builds being a little higher that the last several years but nothing near the replacement rate,” he said. “The BNSF built some cars recently but not in any quantities that would move the needle or could be considered a trend. So, to me this is a CN-specific order.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The Port of Oakland continues its effort to attract more fully-loaded inbound ocean carrier calls by investing in its infrastructure.

The rule, which will take effect on January 29, 2016, adopts regulations that prohibit motor carriers, shippers, receivers, or transportation intermediaries from coercing drivers to operate commercial motor vehicles (CMVs) in violation of certain provisions of the Federal Motor Carrier Safety Regulations.

Like last month, the current state of affairs was presented in somewhat stark terms in the most recent edition of the Shippers Condition Index (SCI) recently issued by freight transportation consultancy FTR.

The planned acquisition of TNT NV by FedEx moved one step closer to fruition last week, when the United States Federal Trade Commission (FTC) signed off on the deal in the form of getting U.S. antitrust permission to merge, according to a Reuters report.

Logistics Management recently spoke with Abtin Hamidi, chief vice president and co-founder of Mountain View, Calif.-based CargoChief, a provider of transportation and logistics technology focused on providing shippers with securing over-the-road capacity and pricing, among other services.


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA