Wednesday, September 15, 2010

Railway Executive Calls for Supply Chain Collaboration

CN's Claude Mongeau calls for greater supply chain collaboration to improve customer competitiveness

MONTREAL, Sept. 14 /CNW Telbec/ - Claude Mongeau, president and chief executive officer of CN (TSX: CNR) (NYSE:CNI), today urged the railway's supply chain partners to work more closely with the company to deliver better end-to-end transportation solutions that will help mutual customers compete more effectively in end markets.

"A transportation system is as strong as its weakest link," Mongeau said in remarks to the Journal of Commerce 5th Annual Canada Maritime Conference here. "We're all only as good as the supply chains we serve. All the more reason, then, for all participants in the supply chains to work together more closely to deliver what our joint customers require."

Mongeau said CN has a vital interest in greater collaboration with its port partners. No railway is more tied to the strength of the North American port system than CN, with access to ports on three coasts and more than a quarter of its revenue derived from overseas shipments.

Mongeau said CN has taken significant steps to improve its supply chain performance. It has marketing and operations personnel working together to develop innovative ways of delivering improved system performance. CN has also instituted end-to-end shipment scorecards to instill greater accountability for meeting customer commitments and to identify and solve issues before they reach the "boiling point."

CN is applying the same discipline and mindset to its relationships with key port stakeholders, Mongeau said, pointing to a series of supply chain collaboration and service-level agreements the railway has negotiated with ports and terminal operators. These agreements focus on specific performance targets, clear service measures and balanced accountability among supply chain participants.

"We can do it. We can work together to help each container, each carload, and each box throughout the journey. We can focus on one box at a time, from end to end, with a new level of reliability."

Mongeau noted: "Instinctively, each player in the supply chain tends to focus on its own performance. This can lead to finger pointing rather than solution-seeking. It's time to build a transparent system, based upon mutual trust and the market solutions that have made all this possible. With the right organization, the right metrics and the right mindset, finger pointing goes away...

"I hope you will join us in this ongoing journey. But don't go to the government at the same time to say that you want more regulations. Re-regulation is not the best course to improve the rail industry in Canada. It would mean less flexibility, less room to innovate and, frankly, less of an urge to succeed commercially. These are all unintended consequences that wise leaders like you want to avoid if you have faith in a market-based economy."

A copy of Mongeau's full remarks is available by clicking on:

CN - Canadian National Railway Company and its operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.