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January 2 2023

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Page 92 of 131

Januar y 2, 2023 | Journal of Commerce 91 EXECUTIVE COMMENTARY 2023 ANNUAL REVIEW & OUTLOOK Surface Transportation The matrix of what that carrier of choice is needs to be constantly reassessed. Relationships are more important than ever as there is, and will be for some time to come, excess demand above what the industry can provide. The rela - tionship the shipper creates with a carrier — both positive and neg- ative — will likely be the principle determining factor in securing sta- ble capacity. It's more than rates; it's timeliness of payment, predictabil- ity of movement, and consistency of freight. Leading carriers can choose who they work with. If shippers view carriers only through their external evaluation of "shipper of choice," they may well find capacity elusive. All shippers need to eval - uate their operations through the same lens. To put it succinctly, if shippers want to secure capacity, they need to examine if they are a shipper of choice themselves. Canadian Pacific Railway (CP) Keith Creel President and CEO The pandemic shone a light on the essen- tial services the US trans- portation industry pro- vides and highlighted the limitations of its networks. We know companies are making decisions based on supply chains as they look to the future. I believe that is a tremendous oppor- tunity for North America and 2023 will be a year that they collectively apply what all of us have learned during the pandemic and set a course for something better. The next step for our historic railroad aligns perfectly with that reality. The expansion of our network through our proposed combination with Kansas City Southern, should the Surface Transportation Board provide its approval, will create a new single-line railroad that would provide greater market reach, bring more competition, create more continue to grapple with demo - graphic shift, continuing and accelerating labor deficits, and infrastructure challenges that slow movement. Our working population is aging and employment vacancies remain at historical records. Our infrastructure remains damaged from the 2021 disaster while improvements are delayed due to a variety of factors, including labor shortages in road construction. Impending electronic logging device (ELD) enforcement in 2023 will affect longer lanes, requiring shippers and carriers to re-evaluate capacity. While many steps are being taken by all parties to address friction points, we do not anticipate a return to baseline 2019 for some time to come. Shippers are going to need to re-examine the concept of a traditional "shipper of choice," particularly their definition. What is the guiding principle? Availability? Timeliness guarantee/ performance? Sustainability? Price? back against policy proposals that threaten the trucking industry — narrowly written labor laws coupled with aggressive emission mandates foster an atmosphere of uncertainty, particularly for owner-operators, who comprise the vast majority of the US trucking workforce. We must advocate for sensible solutions that support our industry and strengthen the supply chain. British Columbia Trucking Association Dave Earle President and CEO Trucking capacity in western Can- ada will continue to be con- strained in 2023. We Canadian National Railway (CN) Tracy Robinson CEO CN is an important part of the North American and global supply chain infrastructure. We play an important role in both supporting the function - ing of the North American and global economies and supporting the growth in economic activity. CN doesn't do this on its own. We are part of larger, complex sup - ply chains. Between COVID-19, the war in Ukraine, and climate-related issues, what has occurred in the past three years has demonstrated our col - lective reliance on predictable supply chain performance. We have also reconfirmed that a supply chain can only function as well as its weakest link. We also know that supply chains are capable of anything, with enough notice. Our industry is certainly feeling the impact of the last three years, but with ever-greater expecta - tions upon us to be able to pivot. These expectations are also on all our partners across the supply chain: ports, terminals, warehousing, truck- ing, and shipping. It is often said that "railroading is an outdoor sport." The fact is that the entire supply chain is "an outdoor sport." We need to collectively under - stand that things will happen to all of us. Rather than blame each other, we need to focus on fixing systemic issues. The best way for us to face these challenges is to drive transparency to improve collaboration and predict - ability with our customers and supply chain partners. This collaboration and visibility across the supply chain will, in turn, demonstrate where key investments can be made to fix sys - temic issues. We can't expect regulations to fix complex supply chains and define how they will perform. It's our job as the supply chain to serve our customers in a way that delivers to our commitments. This takes cooperation, planning and investments. This is the approach that will produce the results we desire and intend. Only then will we be well placed to enable the next level of economic growth of the North American and world economy. Let's get it done together. "Our industry is certainly feeling the impact of the last three years, but with ever- greater expectations upon us to be able to pivot." ◀ "To put it succinctly, if shippers want to secure capacity, they need to examine if they are a shipper of choice themselves." Dave Earle ▶ "Resiliency also means offering customers options and letting their business decisions guide our investments." Keith Creel

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