CN chief sees freight recovery, ‘confidence issue'
(Dow Jones Newswires circulated the following story by Ann Keeton on November 2, 2009.)
EVANSTON, Ill. — Canadian National Railway Co. (CNI) is seeing steady monthly increases in business of 3% to 4%, causing Chief Executive Hunter Harrison to turn bullish for a gradual recovery for rail freight hauling.
Still, he said, "I think it's a confidence issue," he told Dow Jones Newswires in an interview, adding that fear of spending and investing could derail a recovery.
The head of the Montreal-based railroad company spoke Monday at a transportation symposium at Northwestern University. As railroads recover from a 20% downturn, they need to plan in the long term for adding capacity, he said.
Expansion from adding track likely won't happen, because that's too costly, he said. But railroads could become more efficient through mergers, Harrison said. As well, railroads should consider "open access" for some markets, where customers could decide with which freight hauler they want to work. That railroad would pay fees for access to a competitor's track.
Symposium participants on Monday debated plans for high-speed passenger rail service in the U.S., including plans for Midwest service from Chicago to Milwaukee, Detroit and St. Louis. Canadian National operates railroads in the Midwest, where freight train tracks could be used to serve new passenger routes.
"The question is, who pays for it?" Harrison said. The executive said freight train tracks could be upgraded to serve high-speed passenger trains, and high- speed freight trains. But he cautioned that passenger demand may not be worth the price of investment. Spurred by the Obama administration, the U.S. early next year will award $8 billion of financial stimulus money to states to develop high-speed rail.
Before moving ahead, Harrison said, the U.S. needs to form an overall transportation policy, mapping out plans for all high-speed rail development.
Rep. Daniel Lipinski (D., Ill.) said Midwestern states are co-ordinating plans to develop high speed rail. "We've done a good job so far," he said. But he agreed that it remains challenging to work with agencies on the state and local levels to get a train system that will work well from end to end. "I think it would be a good idea to appoint a Midwest rail czar to work on high-speed rail proposals," he told Dow Jones.
Tuesday, November 03, 2009
