11 January 2005

CN to start export-reservation system

The following article is excerpted from the 10 January 2005 edition of “The Journal of Commerce”.

Canadian National Railway, citing a "deteriorating level of service," on Jan. 18 will introduce a tight reservation process for all export container traffic at its largest Canadian intermodal terminal.

Paul Waite, the CN vice president who has been stick-handling "conveyor-belt" practices at Canadian ports and at CN's beleaguered Brampton Intermodal Terminal (BIT) near Toronto, said the new system will be extended to Montreal in February and to CN's other terminals later.

The move is the latest in a two-year series of CN actions that have ruffled shippers and service providers such as members of the Canadian International Freight Forwarders Association (CIFFA). On Jan. 1, CN raised again its tariff for storing import containers at BIT to C$200 (US$162) a day for each day over two days' free time -- including weekends.

Previously, weekends were not counted against free time.

"We cannot be a drop-in service, 9 a.m. to 5 p.m., Monday through Friday," Waite said in an interview. ,,,

CN has been raising fees, tightening free time and setting up a gate-reservation system for import containers in an effort to change traditional practices of shippers and carriers clearing BIT daytimes, five days a week. Despite all this, a current CN note says the terminal is getting more traffic than it can handle, "creating terminal inefficiencies and a deteriorating level of service."

Waite said containers were still piling up at BIT on weekends. The export-reservation system aims to improve efficiency by rejecting containers coming in later than the prescribed times or with improper documentation.

CIFFA said CN is forcing unaffordable costs on captive shippers who, apart from big retailers, cannot afford the costs of operating 24/7. To Waite, these shippers will just have to change.

"I'm going to call it shipping Darwinism: The strong will survive," he said.

For the rest, they might make their own cooperative arrangements to set up their own terminals near BIT and other CN terminals, move containers to them with CN's encouragement in off-hours, charge lower storage fees, and make deliveries from these new entities.

Waite said CN's "conveyor belt" IMX (Intermodal Excellence) system of providing railcars at Vancouver, Halifax and Montreal on a seven-day-a-week basis, taking a flat rate of containers out and in each day was working smoothly. …