MONTREAL — Claude Mongeau, president and chief executive officer of CN, said CN’s rise to rail industry leader from industry laggard in “one of the most profound transformations in Canadian business history” is the product of a compelling corporate vision, continual innovation and strong operational execution.
Mongeau, addressing the Board of Trade of Metropolitan Montreal, said CN has made huge strides since its initial public offering of shares in 1995. Today, CN leads the North American rail industry in profitability and is recognized as a world-class rail operator by virtue of its Precision Railroading business model.
Once largely a Canada-only enterprise, CN now spans 16 U.S. states and eight provinces following C$8 billion in rail acquisitions in the past 15 years. And CN’s market capitalization – just C$2.2 billion at the time of its privatization – today stands at C$30 billion, with CN having generated a total return to shareholders, including dividends, of 21 per cent annually since its IPO.
“Building on a solid foundation, we are staying on a journey to reach the next level of operational and service excellence,” Mongeau said. “Top of the list is becoming a true supply chain enabler to help our customers grow and succeed in their end markets.”
Mongeau said CN is doing just that, citing such recent innovations as collaboration and level of service agreements with Canada’s east and west coast ports and terminal operators, end-to-end supply chain agreements with its coal customers, and a highly successful program of scheduling empty grain car deliveries at elevators.
“It’s all about collaboration between partners, transparency about the facts and the pursuit of commercial interests. A compelling way of moving forward … an effective path to solution-finding to make things go right so we can win our share of world markets.”
Mongeau said change remains a constant in CN’s journey going forward. “And such a vantage point leads me to go beyond CN and suggest that we need more of these success stories in Canada. Because the world is not standing still, we all need to embrace change, not shy away from it. We all need to raise our game, because the game is constantly changing.”
Mongeau said the positive changes flowing from CN’s transformation underscore the importance of Canada’s Rail Freight Service Review panel making the right policy choices in its pending final recommendations to the federal government.
A market-driven environment remains vital to increased supply chain efficiency and innovation, he said, and a central reason why the panel should stay the course in favour of a commercial framework for the rail industry.
“The policy choice is clear. It’s about vision, innovation and execution. It’s about driving improvement and being rewarded for doing so. It’s about the pursuit of innovation and productivity to help foster prosperity across Canada.”