New fuel efficiency program at the heart of CN's Sustainability Agenda

MONTREAL, June 22, 2011 /CNW Telbec/ - CN (TSX: CNR) (NYSE: CNI) is deriving clear gains from its Fuel Management Excellence (FMX) program, which drives both fuel efficiency and environmental benefits.

Keith Creel, executive vice-president and chief operating officer, said: CN is making significant strides in improving the fuel efficiency of its freight train operations, obtaining important sustainability gains and delivering a cost-effective transportation service through a series of initiatives, including the acquisition of modern locomotives, new technology applications to existing locomotives, enhanced analytic abilities, and employee training.

We are particularly excited about our leading-edge work to set fuel efficiency targets for specific trains by route and to monitor train performance against these goals. The targets are based on established benchmarks for key fuel consumption variables such as train make-up, locomotives, train handling, route gradients and curvature, and weather. This strategy to produce real-time information by train and by locomotive is truly the next frontier in precision fuel management.

On average, railroads are four times more fuel-efficient than trucks, according to a recent independent study for the U.S. Federal Railroad Administration. And, importantly, CN leads the North American rail industry in fuel efficiency, consuming, overall, 10 per cent less fuel per gross-ton-mile than the rail industry average. This has helped CN to reduce greenhouse gas emissions and resulted in the lowest fuel surcharge in the industry, helping our customers save on transportation costs.

CN's FMX program includes:

The acquisition of new fuel-efficient locomotives - in 2010 CN purchased 102 new high-horsepower locomotives, as well as 102 second-hand high-horsepower locomotives that are being upgraded. These locomotives are approximately 15 per cent more fuel-efficient than the ones they replace and comply fully with applicable regulatory requirements for reduced locomotive exhaust emissions.
Installation of Wi-Tronix telemetry systems on high-horsepower locomotives. Wi-Tronix provides real-time information about locomotive and train performance through remote measurement and reporting of data, including precise fuel consumption, to an off-board CN computer system at regular intervals or at request. The technology allows CN to optimize the match of locomotive horsepower to the trailing tonnage of the train by isolating or shutting down locomotives and reducing throttle settings. It continuously scans train operations for the proper application of train handling rules to optimize fuel use, determines when and where fueling is required, and ensures temporarily inactive locomotives are shut down. CN expects to equip up to 1,200 high-horsepower locomotives with locomotive telemetry technology by 2013.
Trip Optimizer technology from GE Transportation. Trip Optimizer is a train cruise control system that follows a pre-determined speed trajectory over a GPS track map to optimize fuel consumption. It minimizes braking by planning miles in advance for speed zone and terrain changes. CN's Vancouver-Montreal corridor is fully mapped for this technology, and CN is now moving intermodal trains equipped with the technology over key sections of this corridor. By September 2011, CN plans to have intermodal and merchandise trains in the corridor running with Trip Optimizer technology. CN has 125 locomotives with Trip Optimizer and plans to install this type of technology on up to 400 locomotives by the end of 2013.
Installation of Auto Engine Start Stop (AESS) technology, which automatically shuts down an idle diesel engine, while keeping the locomotive in the proper operating state to start on demand. CN has more than 600 locomotives with this technology, and plans to apply AESS-type technology on up to 800 units by 2013.
Training of train crews and rail traffic controllers. These employees are continually being schooled on best practices, including fuel-efficient train handling techniques, matching power to train tonnage and limiting throttle use, and taking advantage of train pacing opportunities at train meets.

Creel said: FMX is a vital part of taking our precision railroading model to the next level. We believe sophisticated fuel-efficiency and monitoring systems will aid our efforts to measure and report reductions of greenhouse gas emissions and the scope of the carbon footprints of CN and our customers. All this is vital as fuel prices remain a challenge and freight customers put greater emphasis on sustainable transportation options.

Forward-Looking Statements

Certain information included in this news release are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements.

Important risk factors that could affect the forward-looking statements include, but are not limited to, the effects of general economic and business conditions, industry competition, inflation, currency and interest rate fluctuations, changes in fuel prices, legislative and/or regulatory developments, compliance with environmental laws and regulations, actions by regulators, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to Management's Discussion and Analysis in CN's annual and interim reports, Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN's website, for a summary of major risks.

CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related maters, or any other forward-looking statement.

CN - Canadian National Railway Company and its operating railway subsidiaries - 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 metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company's website at www.cn.ca.