Rail Industry News
November 2000

November 22, 2000
North Vancouver, British Columbia

Paul McElligott resigns as President & CEO of BCR Group

John Goldsmith, Chair of the BCR Group of Companies, accepted today the resignation of Paul McElligott as President and CEO of the BCR Group of Companies. Mr. McElligott will join TimberWest Forest Corp. on January 22, 2001, as President and Chief Executive Officer.

Mr. Goldsmith’s memo to BCR Group employees follows:

It is with great regret that I have accepted the resignation of Paul J. McElligott as President and Chief Executive Officer of the British Columbia Railway Company and its subsidiary Companies, effective January 22, 2001. Paul will continue to lead the BCR Group as President and Chief Executive Officer until approximately January 5, 2001, leaving for a short and well deserved vacation before commencing his new responsibilities as President and Chief Executive Officer of TimberWest Forest Corp. on January 22, 2001. He will continue to serve the British Columbia Railway Company in his capacity as a Director and his appointment to this position by Order In Council does not expire until March 31, 2003.

Paul has been with BC Rail since September 1989. Over the course of those years, there’s no question he has left his mark on the Company. He was the first to see the need for BC Rail to tackle head on the challenges of a maturing natural resource sector in British Columbia. The transformation of BC Rail from a railway to a diversified transportation system has helped keep the Company whole through a difficult decade of deregulation, strong competition and declining commodity prices as well as industry consolidation. Behind the scenes, Paul has worked tirelessly with successive Provincial Governments to maintain BC Rail’s profitable, commercial, non-taxpayer supported status. His excellent working relationship with various Boards of Directors speaks to Paul’s diplomatic skills as well as his vision and determination. He has built around him a management team that not only shares his vision but also knows how to implement it. Paul would be the first to acknowledge that much of the work that has been accomplished is due to the efforts of many of you. The Company has developed a clear direction under Paul’s leadership and is much better prepared to meet challenges going forward than it was when Paul moved west eleven years ago.

As announced above, Paul has agreed to continue as a Director of BC Rail and, given the results of an analysis of TimberWest’s businesses, there is no conflict of interest going forward. The Board of Directors met earlier today and an Executive Selection Committee has been formed. The Committee will be chaired by myself and will not include Director McElligott.

The Committee has obtained Board approval to enter into an executive search contract with the international firm of Korn Ferry Vancouver. This firm has particular knowledge of BC Rail’s business and requirements and has successfully assisted the Company in recruiting key executive personnel in recent years. I will be available to meet tomorrow with BC Rail and BCR Marine executive personnel who may be interested in seeking an opportunity to succeed Paul as Group President and CEO.

Given that Paul will continue in his capacity until approximately January 5, 2001, the Board will in due course advise all stakeholders of interim succession arrangements that may be necessary. In any event, the Board will deal with the operational leadership issue on or before Paul’s departure.

On behalf of all of the members of the Board and everyone in the BCR Group of Companies, I wish to thank him for his leadership and his significant contributions.

John T. Goldsmith,
Chairman of the Board

[Source: BC Rail website.]

November 17, 2000
Montreal, Quebec

Canadian National says STB's rail merger rules must be consistent with NAFTA

Canadian National today urged the United States Surface Transportation Board (STB) to ensure its proposed rail merger rules are consistent with the North American Free Trade Agreement (NAFTA) and do not arbitrarily discriminate against foreign railroads proposing transnational mergers.

CN also said in its STB filing that the agency should drop proposed rules that would substitute unnecessary regulation for market-driven decisions, and that would greatly increase regulatory risk and uncertainty for merger proponents. Moreover, CN said applicants in major mergers should be able to obtain a Board decision on their merger within a year of filing their notice of intent to combine.CN agrees the bar should be raised for future rail mergers, based on clear, objective and stringent standards that focus on a transaction's direct effects on competition, efficiency and service. CN said it supports STB rule proposals that would require merger applications to have service assurance and safety integration plans and evidence showing how operational changes would translate into shipper benefits.

"The raised bar must be clearly in sight and no higher than necessary, and it must be the same for everyone," CN said.

"The merger rules should...avoid unnecessary or open-ended regulation; continue to facilitate private initiative; further the public interest in trade and investment flows as envisaged by Congress when it approved NAFTA; and avoid advantaging one group of railroads over another."

CN said NAFTA requires the U.S., Canada and Mexico to accord each other's investors "treatment no less favorable" than they accord, in like circumstances, their own investors with respect to transactions, including acquisitions. Thus, CN said, the STB should not apply different merger standards to Mexican or Canadian railroads proposing transnational mergers than it would apply to domestic U.S. railroad merger partners. Safety, private-sector control, ownership restrictions and U.S. defence needs are issues that should be examined on a case-by-case basis, with the same standards applicable to all North American railroads.

CN emphasized that Congress, in signing NAFTA, committed the U.S. to the full liberalization of the North American railroad industry.

Canadian National Railway Company 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 cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.

[Source: CN website.]

November 15, 2000
Montreal, Quebec

CN, BNSF sign marketing agreement targeting creation of multiple interline services for new carload business, Railroads make Western Canada - U.S. Pacific coast market initial priority

Canadian National Railway Company (CN) and The Burlington Northern and Santa Fe Railway Company (BNSF) announced today an agreement to implement highly-competitive, customer-focused interline rail services for new carload business.

CN's and BNSF's first interline service under this agreement will link markets in British Columbia, Alberta and Saskatchewan with markets in Washington, Oregon, Idaho, California, Nevada, Utah, Arizona, New Mexico and El Paso-Sierra Blanca, Texas.

The marketing agreement gives the two railroads authority to market and price carload traffic originating on one carrier and terminating on the other without first having to negotiate the terms and conditions of the movement.

This joint authority will simplify pricing, enhance response time, and increase customer satisfaction.

New carload interline services are also being contemplated by CN and BNSF in other corridors.

James M. Foote, CN's executive vice-president, sales and marketing, said: "This marketing agreement is yet another example of how CN and BNSF are working together to pursue growth opportunities and to develop ways of making it easier for shippers to use our rail services and to do business with us. CN and BNSF will benefit from opening up new rail interline markets in key international and significant domestic corridors in the United States."

Charles L. Schultz, BNSF's executive vice-president and chief marketing officer, said: "This marketing agreement will increase the railroads' share of existing and prospective markets, and ensure each carrier benefits from profitable market expansion. It will greatly extend each partner's reach and promote efficient routings that will benefit our customers."

The Western Canada-Pacific coast interline initiative will take advantage of BNSF's comprehensive new service package for carload freight moving between Vancouver, B.C., Northern California, Southern California and Arizona.

BNSF's new service for carload customers on the I-5 Corridor, named for the Interstate Highway it parallels, includes:

• Five-day service between Vancouver and the San Francisco Bay area;
• Five-day service between Vancouver and the Los Angeles area, and
• Seven-day service between Vancouver and the Phoenix region.

As part of this service package, BNSF is offering the rail industry's first Carload Service Assurance Program, including Guaranteed Service, Service Insurance and a No-Strings Option.

The marketing agreement is the latest in a series of co-operative ventures announced by CN and BNSF following their decision last July to terminate their combination agreement. The railroads have recently implemented:

• A service agreement creating a bimodal RoadRailer network linking Montreal, Toronto, Chicago and the Pacific Southwestern states of California and Arizona for perishable and dry van traffic, and
• A second service agreement providing agricultural products new efficient routings over CN and BNSF lines in Illinois and Iowa.

CN 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 cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.

Headquartered in Fort Worth, Texas, BNSF operates one of the largest rail networks in North America, with 33,500 route miles of track covering 28 states and two Canadian provinces.

[Source: CN website.]

November 13, 2000
Montreal, Quebec

Canadian National acquires minority equity stake in FreightWise Internet transportation marketplace, FreightWise to extend Internet freight exchange to Canada in mid-2001

Canadian National announced today a strategic investment in FreightWise, Inc., a neutral, comprehensive and multi-modal Internet marketplace for buyers and sellers of transportation. CN will also use FreightWise as a sales channel for its key intermodal services.

FreightWise, which today announced the launch of its online marketplace with leading American shippers and carriers, is scheduled to offer coast-to-coast and transborder truckload and intermodal services in Canada in mid-2001.

CN said it will actively support and promote the use of FreightWise by Canadian shippers and carriers. Shippers will have the choice of purchasing CN's domestic Canadian and transborder (Canada/United States) intermodal services through FreightWise.

CN President and Chief Executive Officer Paul M. Tellier said: "CN's introduction of FreightWise in Canada will generate significant benefits for both shippers and carriers.

"FreightWise will make it easier, more efficient and more reliable for shippers and carriers to negotiate and execute freight transactions online. Significantly, FreightWise will be open to all shippers and carriers."

Greg Fox, president and chief executive officer of Fort Worth, Texas-based FreightWise, said: "FreightWise welcomes CN's strategic investment and regards CN's use of FreightWise in Canada as a significant development for our company. We believe CN's brand strength, its knowledge of freight markets and multiplicity of freight service offerings in Canada and the United States will be critical to the exchange's success.

"CN's investment is consistent with our plan to seek strong strategic equity partners. FreightWise plans to include other modes of transportation and expanded services in the future."

FreightWise does away with the inefficiency and expense of the traditional paper/phone/fax process of filling last-minute capacity requirements. It provides load matching for buyers and sellers of transportation and fulfilment capability through committed carrier capacity, enabling complete multi-modal freight movements. FreightWise also allows exchange users to conduct entire transactions online - from load matching through financial settlement. Sellers on FreightWise can offer their capacity through standard rates and auctions.

FreightWise went live on Oct. 28 after successfully completing a controlled launch with a select group of shippers and carriers, including the two largest truckload companies, Schneider National and J.B. Hunt. As participants, these companies have been transacting some of their transportation business through the FreightWise exchange with live shipments.

FreightWise is quickly establishing itself as the freight industry's leading Internet marketplace. Named by Forbes Magazine as "Best of the Web", FreightWise was incorporated in October 1999. Its investors include Burlington Northern Santa Fe Corporation (BNSF) and General Electric Company (GE), both of which will be active participants in the online exchange.

Shippers, particularly small shippers, will benefit from greater choice and a seamless process in using FreightWise - they can find a carrier, get a price, order equipment, and track, trace and pay -- all online.

Freight carriers will also enjoy gains from FreightWise, ranging from broader market reach, to increased asset utilization, to improved cash flow. FreightWise will make it easier for carriers to find back-hauls.

About Canadian National:
Canadian National Railway Company 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 cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.

About FreightWise:
FreightWise, Inc., is an Internet marketplace for buyers and sellers of transportation - shippers, carriers and third-party service providers. FreightWise currently offers truckload and intermodal transportation through auctions and published rates and will expand to other transportation modes and services. For more information, visit the site at www.freightwise.com.

[Source: CN website.]

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