CN's focus on supply chain collaboration driving positive results for western Canadian coal shipments

Year-to-date 2010 CN west coast coal volumes up significantly over 2009

EDMONTON, Sept. 28 /PRNewswire-FirstCall/ - CN (TSX: CNR) (NYSE:CNI) said today a comprehensive new supply chain approach to managing the flow of coal from mines to west coast terminals is helping the railway improve service to its coal customers and grow their volumes to Asian markets.

A series of clear metrics make the supply chain more transparent to CN managers - a weekly report shows how much coal is on hand at export terminals and mines, the arrival date of vessels at the ports, the amount of coal being shipped from mines, and the number of trains enroute to and from the mines.

Andy Gonta, CN vice-president of bulk commodities, said: "This end-to-end view of our coal supply chain, along with a focus on closer customer collaboration, improves coal logistics, which in turn allows coal producers to maximize sale opportunities. This approach also positions the railway and its customers to anticipate and solve any bottleneck issues well before they reach the boiling point."

Neil Winkelmann, chief operating officer of Western Coal Corp., stated: "Western Coal will significantly expand its operations in northeastern British Columbia over the next three years, and can only do so with the support of key suppliers such as CN."

Bud Smith, chairman of the board of Ridley Terminals Inc. (RTI), said: "Safe efficient coal movement from mine to customer grows Canada's productivity in this critical export sector. RTI and CN are advancing measures for more effective collaboration within our part of the logistics chain."

CN's new supply chain approach, rebounding Asian steel markets, and business from new mines have combined to generate stronger coal shipments to western export terminals. Year-to-date 2010 through the end of August, CN's west coast coal carloads to two terminals in the Vancouver area and one at Prince Rupert rose 91 per cent.

Gonta added: "This is a win-win innovation for all the players involved in the coal supply chain. Transparent measurement and balanced accountability are key to our overall ability to tap growing markets."

Forward-Looking Statements

Certain information included in this news release constitutes "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 of 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 factors that could affect the above 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.

SOURCE CN