CN improves supply chain efficiencies, increases car capacity for North
American steel traffic

MONTREAL, Oct. 7 /CNW Telbec/ - CN (TSX: CNR) (NYSE:CNI) said today it has developed new supply chain efficiencies to help it better meet short-term car order requirements of major steel producers in Canada and help them to compete more effectively in their markets.

As part of this initiative, CN has established strategic car staging locations near producer facilities, allowing it to respond quickly to producers' spot sales requirements. One location is at Sorel-Tracy, Que., northeast of Montreal, the other at Paris, Ont., located west of Hamilton.

CN is also acquiring 200 standard gondolas and 200 open coil gondolas to expand and improve the quality of its freight car fleet serving the North American steel industry.

The new gondolas and coil cars follow CN's acquisition of almost 700 new iron ore cars this year and last for hauling pelletized iron ore in the Upper Midwest.

Jean-Jacques Ruest, CN executive vice-president and chief marketing officer, said: "CN is working closely with its steel customers to develop innovative transportation solutions that make the entire supply chain more efficient."

Yasushi Tago, president of Sumitomo Canada Ltd., said: "We are pleased to see CN's investment in end-to-end transportation solutions and the company's commitment to meeting the needs of our business. A reliable, efficient transportation system is vital to the success and growth of our business during this economic recovery."

Ruest said: "CN's network reaches the vast majority of major Canadian and U.S. hot-rolled steel production capacity and features an extensive network of strategically located transloading facilities. We also play a critical role in the raw materials supply chain of the steel industry through our transportation of iron ore.

"CN wants to expand its steel business. With an end-to-end supply chain focus and new equipment, we aim to help our steel customers grow and capture an increasing share of their new business."

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 further information: Media: Mark Hallman, Director, Communications & Public Affairs, [phone]; Investment Community: Robert Noorigian, Vice-President, Investor Relations, [phone]