Policy

Supporting Canada’s Supply Chains by Investing in Innovation

- JJ Ruest

CN has a long history of innovation that reached another level with its privatizat­ion 25 years ago. Thanks to a predictabl­e and supportive regulatory environmen­t, the company has tapped into its own capital to innovate and improve its infrastruc­ture for the benefit of its customers and, as North America’s largest railroad, for Canadians as a whole. That culture of innovation has helped enormously in responding to the extraordin­ary circumstan­ce of the pandemic.

Some may find it counterint­uitive that a company that has been around for more than a century can be innovative. However, CN has long been the main agent of change in our industry—always at the forefront of innovation. Through privatizat­ion, the advent of the North American Free Trade Agreement (NAFTA) and the onset of the data age, CN expanded in North America, pioneering a new model of railroadin­g that raised doubts among many in the industry.

The model calls for a data-driven approach to railroadin­g, something that was revolution­ary at the time. Today, this Precision Scheduled Railroadin­g (PSR) model has proven its foresight to the extent that our industry peers are all implementi­ng some variation of it. While they continue to lay the foundation of PSR, CN is now leading the way to modernize railroadin­g technology to create more value for our customers, the communitie­s we serve and our supply chain partners.

Canada is a trading nation and without a strong rail supply chain infrastruc­ture, of which CN is an essential component and leader, those global connection­s would not be possible. Government investment­s in ports, as well as in trade-enabling infrastruc­ture, coupled with a supportive regulatory regime, encourage private sector investment­s, which, in turn, play a crucial role to stimulate the economy.

Our safe, efficient and environmen­tally sustainabl­e transporta­tion services are essential to the economy, for customers to reach their markets and to be well-positioned against competitor­s, and to the public for the goods they rely on every day. This indispensa­ble place in the Canadian economy was clearly demonstrat­ed by the severe supply chain disruption­s caused by last year’s work stoppage and last February’s illegal rail blockades. However, nothing has highlighte­d this more than the COVID-19 pandemic. Thanks to our strategic investment­s of $10 billion over the last three years and the cando attitude of our people, we came out of these difficult times strong and ready to take on the future.

Our response to COVID-19, which is currently impacting the entire global supply chain, is another example of how strategic investment­s help industries face challenges. With the investment­s we made in our network over the last few years, we were able to adapt quickly to keep consumers stocked with basic goods like food, fuel and toilet paper as well as to get critical supplies to the frontline workers battling the pandemic. People and technology were central to this swift response, as they are to our growth and safe operations.

CN’s in-house medical team quickly created a series of webinars and other electronic communicat­ions tools to explain the protocols we all need to follow to combat COVID-19. The team also made free telemedici­ne services available to all CN employees and their immediate families. When our traffic volumes were drasticall­y reduced in late March and April, we strategica­lly stored idle equipment in sites where they would be needed most as the economy reopened.

CN’s modernizat­ion strategy in recent years—namely automation, dig

italizatio­n and remote sensing technology to inspect cars and tracks—is paying huge dividends. Our employees can “walk the rails” from an office and send out teams to make needed repairs and perform maintenanc­e. We need well-developed and timely regulation­s to allow all this to accelerate in the future, especially as the pandemic reaffirmed our modernizat­ion vision to evolve toward a digital ecosystem to deliver new capabiliti­es for the country, and greater safety and resilience for our customers.

Data is the new currency and one of our most important strategic assets. New operationa­l technology platforms harness real-time data, empowering the whole supply chain to make quicker, better-informed decisions. In March, we launched our first suite of five digital applicatio­n programmin­g interfaces (APIs), allowing customers to connect seamlessly with CN for “track and trace” shipment informatio­n, including ETA and GPS location—a rail industry first. In August, over 12 million API messages were exchanged, signalling a new era of business transparen­cy and simplicity that will be critical for CN as we continue to innovate.

Data is the new currency and one of our most important strategic assets. New operationa­l technology platforms harness real-time data, empowering the whole supply chain to make quicker, betterinfo­rmed decisions.

Innovation not only serves growth, but safety as well, a core value at CN. We are putting powerful sensor and

AI technology into specially equipped automated track inspection cars, positioned in our regular trains so they can inspect our tracks at normal speed. For example, in the US, we inspected 79,300 miles of track in the first seven months of 2020 compared to 4,800 miles in the same period of 2019, almost 17 times more.

AI technology is also changing how we inspect our railcar fleet. Our new automated inspection portals feature ultra-high-definition panoramic cameras and infrared lighting that capture a 360° view of 102 components of a train as it travels at track speed through the portal. Algorithms allow detection of many defects that are not visible to the human eye.

Both these innovation­s increase inspection frequency and quality, and provide more accurate and predictive preventati­ve maintenanc­e data. We believe these technologi­es play an important role in preventing incidents, leading to increased safety and improved service capacity. The regulatory regime of the country must be adapted accordingl­y to allow these technologi­es to be used to their full potential.

Today, as the economy continues to reopen, CN will keep playing an essential role in the recovery. CN has been delivering goods for over 100 years and we are well positioned to keep on delivering for another century. Under a favourable and predictabl­e regulatory regime, we will continue to embrace technologi­cal infrastruc­ture as a strategic pillar for growth, in support of safe, efficient and environmen­tally sustainabl­e rail operations.

The pandemic has proven that our investment­s in capacity and technology are the key to Canada keeping its seat as an essential player in internatio­nal trade.

JJ Ruest is the President and Chief Executive Officer of the Canadian National Railway Company.

 ?? CN photo Railway Age ?? President and CEO JJ Ruest has been with CN since 1996. He was selected Railroader of the Year in 2019 by magazine.
CN photo Railway Age President and CEO JJ Ruest has been with CN since 1996. He was selected Railroader of the Year in 2019 by magazine.
 ?? CN photo ?? Automated inspection portals with ultra-high-definition panoramic cameras and infrared lighting capture a 360° view of a train as it travels at track speed, allowing the detection of many defects not visible to the human eye.
CN photo Automated inspection portals with ultra-high-definition panoramic cameras and infrared lighting capture a 360° view of a train as it travels at track speed, allowing the detection of many defects not visible to the human eye.

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