Canadian National Railway Co. The year 2000 was a tumultuous one for Canadian National and the North American railroad industry. Rail mergers, rail service quality and rail competition issues were the focus of intense public debates that will continue unabated this year. At stake in these debates are the industry s future structure and ability to earn its cost of capital. Burlington Northern Santa Fe Corp. The Surface Transportation Board s rail merger moratorium, upheld by the U.S Court of Appeals, forced CN and BNSF to terminate their combination agreement. Looking forward, the STB s proposed rail merger rules would significantly increase the subjectivity of the merger review process and reduce the predictability of the process for merger proponents.
Rail service is a hot-button issue for many shippers.
At CN, we have a service plan that works. Competitive access issues will preoccupy many rail executives in 2001. Equally important, these regulatory regimes benefited, and continue to benefit, shippers with significantly lower rates. Canadian and US railroads must make it abundantly clear to governments that further deregulation is the policy path of choice. Regulatory changes that prevent increased rail efficiencies, or inhibit the industry from earning its cost of capital, are a prescription for rail disinvestment and railroad decline.