CN Rail -- Prince Rupert's Most Vital Link (still)

I thought to call this meta-essay 'From Charles Hays to George Hayes'.
The Grand Trunk Pacific RR founder and the contemporary Hayes both consider Prince Rupert's destiny in the port. But the GTP went broke; the line was nationalized into the Canadian National (CN) in the 1920s. Since then the RR, the city, and the port seemed separable, components of a larger systems.
Now CN has been privatized, and George Hayes (Northwest Transportation Corridor Task Force Report--to be reviewed later) looks towards highways and airports as integral to Rupert's port future. Here I side with Charles: the RR = the Port, and I am not optimistic.

CN--- Stock market-- rising

CN's Paul Tellier (yes, he is the fellow from the Trudeau era) was the picture boy of the winter '96 stock market and media: Railroad Age's man of the year. Articles in Maclean's, Traffic World (most informative), etc., his acceptance speech, articulates his vision (we are all continentalist now) etc.
The hype: Canada's "most successful privitization"; a company remade "physically and culturally". All this because CN's initial stock release rose from 16$ to 60$.
The media types quipped CN was "no longer an employment agency". And now "the chief concern is the bottom line and not Canada".
Words of wisdom from the stock market.

Restructuring CN for the bottom line

I see 3 CN strategies in play: Lower Costs: Refocus; Maximize Revenues

• Lower (fixed) costs translates into fewer employees (see table) and pruning away branch lines.
  Available figures (Table) suggest the easy cuts are over; that increased profits came from fewer employees, not more traffic.
  The market agrees:

Source CN--modified

• When CN talks about its 'market position' they divide their operation into "corridors" and "Commodities" hauled. Unspoken is the underlying concept of competitive and secure (monopoly) transport markets. See table below.

Source CN modified

• Refocusing --recent press releases deal with New York States lack of competition due to US rail restructuring. Looking at CN's system map indicates to me that CN is looking south from Montreal as their future

• Map source CN
• CN acts like any other private company now: it's the bottom line not Canada that is crucial. Prairie grain farmers have not only been hit with system gridlock (blamed on winter storms), but have had to absorb 2 rate hikes.

A closer look at western Canada's ex-ports

Coal and Grain drive the western export system (both in Vancouver (graph right) and Prince Rupert). Thus "70% of those ports' volume is exports to Pacific Rim".

Not only is the western ex-port market and commodity base narrow, it is not as profitable as the eastern NAFTA market to CN. (See Table 2 above).

• CN has "exclusive access to Prince Rupert", but also "connects directly to the Neptune Terminal in North Vancouver, which is one of the lowest-cost bulk facilities on the Pacific Coast". (emphasis mine)
• CN's more northerly route is "less susceptible to grain traffic diversion through the United States". (Marketing-speak for competition).
• Going east? " As the second-largest carrier of forest products in North America, CN's west- to-Chicago corridor is the shortest route to the U.S. Midwest for northern B.C. fibre reserves." (Market-speak for our FORESTS- emphasis mine).

The Port of Churchill was "pruned"

THEMES IN CANADIAN HISTORY

Nineteenth Century western Canadian history can be seen as conflict between HBC and the St. Lawrence based Europeans to control western resources. When furs became depleted, grain became the new commodity. Thus CN and CP railroad lines across Canada carry the two old antagonists (northern or Arctic routes vs. southern or St. Lawrence) into the twentieth century. If the twenty-first century is really NAFTA, then this east-west conflict is irrelevant.
So Churchill was sold; and Rupert became a branch line. The Mississippi drainage system supplants the St. Lawrence. Will Canada, then, follow HBC into history?

ANY LESSONS FROM CHURCHILL?

CN sold to OmniTrax. I assume that short-line specialist and locomotive renter fit into CN's vision. Churchill will just have to adapt.

Churchill's responses look surprisingly familiar:

CPR

Its web site is more informative than CN's: see the financial information for example. While not so admired by the media it has been the stock market is less volatile:

INDEX for NorthCoast Economies