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CN orders 232 new iron ore cars

Undertakes 500-car refurbishment program, as part of long-term upgrade of Upper Midwest ore fleet
[G2:1394 n=0 frame=none size=150]DULUTH, Minn., Oct. 9, 2008 — CN (TSX: CNR)(NYSE: CNI) announced today the acquisition of 232 rapid-discharge ore cars and refurbishment of 500 existing ore cars as part of a long-term plan to upgrade the company’s car fleet for transporting pelletized iron ore produced in the Upper Midwest.

Delivery of the new ore cars will start in January 2009, permitting the retirement of the same number of older cars.

The refurbishment of 500 existing ore cars is underway and includes the installation of new trucks and couplers, modernizing the braking system and repairing outlet gates.

CN’s existing iron-ore fleet consists of almost 2,200 cars. CN foresees acquiring more new iron ore cars over the next three to five years and refurbishing another 500 cars next year. In the years ahead the new cars will permit the retirement of an equivalent number of cars.

James Foote, CN executive vice-president, Sales and Marketing, said: “CN’s iron ore business in the U.S. is performing well and we anticipate continued strength in this market segment in future. That’s why we think the time is right for CN to acquire new iron-ore cars and to rebuild other cars to extend their service lives.

“Our fleet renewal program will increase rail efficiency and deliver better service to our iron-ore customers, who are important economic forces and employers in northern Minnesota and northern Michigan.”

CN hauls pelletized iron ore in unit trains from three mines in northern Minnesota and one in Michigan primarily to Great Lakes ports for transportation to North American steel producers. Some traffic moves on all-rail routes, and some is moved to export position for overseas markets.