CNI, INRD in Business Venture - Analyst Blog

By Zacks | January 17, 2013 AAA

Canadian National Railway Company (CNI) co-partnered with Indiana Rail Road Company (INRD) to set up an intermodal terminal in Indianapolis.  

Located near INRD's existing Senate Avenue Terminal, the new unit is in downtown Indianapolis and adjacent to Lucas Oil Stadium. The terminal, which will also have a container yard as well as agricultural products export loading platform, is currently being constructed and is scheduled to be operational from June, this year. The facility will provide importers and exporters of the state of Indiana with an all rail transportation option for products moving to and coming from Asia in crates.

According to Canadian National Railway, this all rail service will benefit Indiana importers by cutting down the transit times and offering consistent transportation, leading to smooth supply chains connectivity. The imported goods from China and Korea are expected to arrive at the Senate Avenue Terminal within 18-20 days via this new service unit.

Privately held INRD stated that this direct-west coast intermodal service will clear much of the bottleneck that importers faced in the past and will offer steady, regular and environmentally friendly hauling of cargo.

Montreal, Canada based Canadian National Railway is in constant attempt to improve its railroading (velocity, reliability, lowers costs and asset utilization) standards. The company plans to invest over $1 billion towards track and infrastructure improvement as well as productivity initiatives.

Recently, the company initiated operations at Calgary Logistics Park with the opening of a new intermodal terminal. Through this new intermodal service, the park is made available for shipping consumer as well as industrial products.

Despite these positive actions on the part of the company, we maintain our long-term Neutral recommendation on the stock, keeping in view the sluggish economic conditions and stiff competition from peers such as Canadian Pacific Railway (CP). The stock currently retains a Zacks Rank #3 (Hold).

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