Riding on the positive momentum of the global economy, especially increasing demand for trade and cargo in North America and Asia, Canadian-based railroad CN continues its drive to support its expanding service offerings in Asia. The foundation of its growth comes from having invested in their Asian headquarters in Shanghai over 10 years ago, which included sales offices in Beijing & Hong Kong as early as 2004. This year the company is participating in the ‘Asian Logistics and Maritime Conference’ organized by the Hong Kong Trade Development Council. CN is also sponsoring the “Extend Your Reach: Connect With North American Markets” forum.

JJ Ruest, the company’s Executive Vice-President and Chief Marketing Officer, will join other world-class supply chain specialists at the forum to discuss tapping into North American markets. Ruest will also share CN’s experience in supply chain management and its best practices in dealing with customers across the region.

Ruest said that about 25 percent of the company’s total revenue of approximately CAD $13 billion comes from business related to exports to and imports from Asia. He added that for imports from Asia, the company’s major markets are central Canada and the Midwest United States, with consumer goods making up the majority of the imports. As for exports, natural resources from Western Canada such as minerals, forest products, grains and derivatives of natural gas represent the main export categories.

He mentioned that CN tapped into Asian markets 30 years ago mainly as an exporter of natural resources. When container shipping of consumer goods started to become a popular trend 20 years ago, the company embarked on import business from Asia. Apart from its Asian headquarters in Shanghai, the company has set up representative offices in several Asian cities, including Hong Kong, Beijing, Taipei, Singapore, Seoul and Tokyo. In the past 10 years, the company has also actively developed its maritime supply chain collaboration business of shipping to and from Asia.

Through the alliance with its business partners such as ocean carriers and freight forwarders, the company’s supply chain management service now covers the three major oceans, the seven major ports, a railway connecting with inland interchange points, as well as many inland container terminals.

Ruest noted that North America and Canada are experiencing strong economic growth, which has led to an increase in imports. Consequently, the company’s market share in the East Coast and West Coast of the United States has increased. The expansion of CN’s Prince Rupert intermodal terminal in Western Canada will be completed this year, as well as the expansion of Deltaport at the Port of Vancouver will be complete as early as 2018, as the company sets out to capitalise on the growth of Asian markets.

He also highlighted that an increasing number of exporters and freight forwarders are seeking to raise the visibility levels on goods during shipment. In view of this, the company is investing about CAD$500 million in a five-year project to develop an IT system with the aim of raising the visibility and connectivity levels throughout the supply chain. For instance, it would provide comprehensive data on the movement of export containers at the company’s partner ports, railroads and truck fleet. “In recent years, the application of IT in the logistics supply chain has become a growing trend. However, there are few industry players who make the kind of investment CN is making to provide high visibility levels throughout the shipping process,” Ruest emphasises.

The company also provides real-time data on cargo movement to its container shipping company partners, such as COSCO Shipping, to ensure service consistency. More importantly, he noted that the company’s supply chain management has the capability to provide its customers and supply chain partners with the quickest routes for container movement after the ship has docked.

Ruest contends that competition is intensifying in markets in Europe, the United States and Asia, and industry players must provide quality services at low costs. In the past 10 years, CN has been one of the lowest-cost operators in rail freight transport. It also has competitive advantages in logistics supply chain service in terms of speed as well as stability and reliability of service.

JJ Ruest said that CN foresees a very positive outlook for the growth of its business from Canada and Asia (particularly mainland China) for the next three years, with container business being the main driver of growth. “The economies of Canada and North America are expected to experience steady growth. Therefore, we are hoping to join forces with our business partners to establish supply chain service in Canada and the U.S. Midwest, in order to increase our market share.” Ruest believes the company can improve its competitiveness by improving the speed and efficiency of its shipments.

At the Asian Logistics and Maritime Conference to be held on 23 and 24 November, Ruest will attend the thematic forum ‘Extend Your Reach: Connect with North American Markets’ and share his supply chain experience with industry peers. He will also offer analysis of North American economies and strategies for tapping into North American markets, especially the importance of business diversification, at the present time.