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Railways go nimble in a changing freight business

Canada's two largest railways are relying on business partners to help carry the weight through rocky economic times.

Canadian National Railway Co. and Canadian Pacific Railway Ltd., which report their third-quarter results on Tuesday, are making improvements to their supply chain to move goods more efficiently.

CP plans to capture more of the market for industrial products, many of which have been traditionally transported by truck. To gain ground, the railway has teamed up with Contrans Group Inc., a trucking firm based in Woodstock, Ont.

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Contrans and CP will co-operate to broaden their shipments of intermodal freight, or goods that are readily transferred between trucks and trains. Another company, Raildecks, will provide equipment known as "flat racks," or open containers with no walls or ceilings. Historically, intermodal freight has been transported inside standardized metal containers with four walls.

In a summer trial using collapsible flat racks at CP's yard at Vaughan, Ont., "pipe and other industrial products moved seamlessly on CP's long-haul intermodal trains," the Calgary-based railway said.

Steven Brookshaw, vice-president of flatbed operations at Contrans, said that for shipments going longer distances, it often makes better sense to send cargo such as lumber, drywall and steel coils by train instead of truck. "In the transportation world, we have to work together to satisfy our customers," Mr. Brookshaw said an interview.

CP spokesman Ed Greenberg said the railway is being nimble. "In addition to continuing our network capacity expansion and working closely with our customers, we are building up staffing and equipment resources," Mr. Greenberg said.

CN is also strengthening its collaboration projects, including one with Agri-Food Central Ltd. The two companies have signed a pact to bolster their delivery schedules. "Agri-Food Central loads bags of lentils, canary seed, flax and peas into 53-foot [16-metre]containers at CN's Winnipeg intermodal terminal," the Montreal-based railway said. "CN then hauls the containers by rail to Montreal, Vancouver and New Orleans for export, as well as to Mexico in co-operation with Kansas City Southern Railway."

In another deal, CN has acquired 200 more "EcoTherm" containers to bring its fleet to nearly 500 units. The insulated containers can carry temperature-sensitive products, including beer supplied by Molson Coors Canada. Molson Coors said it "appreciates CN equipment design that is truly adapted to the rugged Canadian climate," preventing beer from freezing while in transit.

The moves by CN and CP come as the North American railway industry braces itself for an economic slowdown.

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