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Blockade in Tyendinaga, ON - Update

Dear Customer,

The following excerpt is taken from a Customer Bulletin received from CN:

[Start]

We would like to update you on the status of the illegal rail blockades on our rail network.

While the illegal blockades have come to an end in Manitoba and British Columbia, our focus in Western Canada is on a safe, disciplined and progressive return to normal service.

Our recovery plan will be focused and disciplined to reduce congestion without overwhelming parts of the supply chain that are the most vulnerable, such as ports, yards and interchange points.

Our recovery however, is unfortunately impeded by a temporary Ministerial Order issued by Transport Canada on February 6th. The new Order effectively reduces the speed of “key trains” carrying certain types and levels of dangerous goods. This has the result of reducing the capacity of our network by at least a third. As a result, the speed on our CTC-capable (automated train dispatching and signaling) coast-to-coast mainline track drops by half, from 50 miles/hour to 25 miles/hour.

Yesterday, we sent a letter to Minister Garneau, asking for a 14 day suspension of the order on CN following the resumption of service. This would be a meaningful contribution to help restart the economy and quickly regain some of our trade reputation around the world.

East of Belleville, the injunction orders for the illegal blockade at Tyendinaga, ON, have yet to be enforced and continue to be ignored by the protesters. We have tried to adjust our operations to serve customers in the face of these challenges, but have been forced to progressively shut down our Canadian operations east of Belleville, ON until the illegal blockades end.

This progressive shutdown will be methodical to ensure that we are well set up for recovery, which will come when the illegal blockades end completely. This includes stopping and safely securing trains destined to points east of Belleville, ON and may imminently lead to temporary layoffs within the company’s Eastern Canadian operational staff.

This progressive shutdown does not include traffic between CN’s Brampton terminal and MacMillan yard and Western Canada and the United States. Should you require any further information please contact your Account Manager or Customer Service Representative.

With upwards of 400 trains cancelled since the blockades began eight days ago, we expect that the recovery will require time and a disciplined approach that will necessitate the full use of our assets, as the surge of backlogged traffic, in our yards, and customer facilities works its way through the rail network.

Thank you for the support, as well as your patience and collaboration during this difficult period. The entire CN team is committed to returning to the level of reliable service to which you are accustomed when all the illegal blockades end completely.

[End]

We will continue to provide updates as they become available.

Sincerely,

HENSALL GLOBAL LOGISTICS

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