Question-and-Answer Session
Operator
Thank you. At this time we will take questions from the telephone lines. [Operator Instructions]. We have a question from Ed Wolfe from Bear Stearns. Please go ahead.
Unidentified Analyst
Hi guys, its Scott Ehrens [ph] for Ed. Good afternoon.
E. Hunter Harrison - President and Chief Executive Officer
Hi, Scott.
Unidentified Analyst
Couple of quick ones, one, Claude did you break out the, with the Central Station and EWS I know you said $0.20, did you break out how much for each, am I miss that?
Claude Mongeau - Executive Vice President and Chief Financial Officer
No actually I haven't because the numbers in the annual vary depending on the exchange rate of the British pound and the finalization of our accounting for the Central Station, which include the sale leaseback. So, I think overall it's around $0.20 and we'll give you more details when we have actually done all of those entries in the fourth quarter.
Unidentified Analyst
Okay, great. On the headcount side up about over 2.5% with volumes down 3%, I know last quarter you have talked about some taking on doing more contract work, and how much of the headcount is for that and how much is for ramping up for Rupert and how do we think about headcount going forward?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Well, there're couple of things that I can bring out, the contracting impact from the engineering standpoint so far is that of 160 people. We talk about for sometime that we're going to be contracting more in and net-net best calls to us. We're also going. We have the demographics in the West. We've lower employee, I think we've about... average age is about 47. So, we are doing now hiring to replace retirees, and we have an overlap there. So, when 300 or 400 people are going to retire for some six months, we have 800 people, if there is a 400 are live in.
Now, one other things that we are doing in the belt-tightening exercise, is going to reviewing the training we are doing for the people. And we, I think now comes at conclusion that we can give the same amount of hours of training, but do it in a three to four months timeframe rather than six months to help that situation. And then a few of... some of the other employees are result of just ramping up CN worldwide and CN worldwide North America to the mid-tier [ph]. So that that gives you some kind of flavor for headcount because that is... that bugs of trend that we have been going in the opposite way for sometime.
Unidentified Analyst
That's helpful Claude and is that 2.5% a good run rate to you as going forward?
Claude Mongeau - Executive Vice President and Chief Financial Officer
No I think we're going to come down a more closer to flat they are going forward because some of these items are one-time in nature, the engineering employees is a good example. We may continue to see a increases there, but not to the tune of 160, and similarly further running trade. Ones you get your compliment of people in training, we may have 400 and 500 at the moment in training. You don't need, you just replenish them when they go into the workforce and we don't go higher than what we have at the moment. So, flapped is slightly up depending on volume would be better number to use.
Unidentified Analyst
Okay, that's of. And just one last one for Jim, on the revenue for carload up 1%. Can you just... I know you gave, can you just give again the split on fuel, price, and mix and what are exchange rate, how that comes into play and if we should be thinking about that going back up as we get to the fourth quarter and beyond?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Well excluding exchange here again the numbers that I provided was that price would have been up 4%, revenues up 4% from price up 2% from mix down 2% from volume and down 1% from fuel.
Unidentified Analyst
Okay. That's helpful. Now... is that I mean... in that 4% for price was that was same as last quarter isn't?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Yes right that's again, you know, again on a per unit basis we have gone up slightly into the range of 4% to 5%. 4% I believe is what we are exactly, what we said in last quarter, and I believe the quarter before so that's the range and I would like to see that overtime move close, which is the 5% in the range, but I can't tell you exactly when that will happen.
Unidentified Analyst
Okay. So, as we just say kind of about these depressed levels until the exchange rate kind of normalizes?
Claude Mongeau - Executive Vice President and Chief Financial Officer
4% price.
Unidentified Analyst
No the total report yield, kind of like revenue for --
Claude Mongeau - Executive Vice President and Chief Financial Officer
When you look at exchange alone in this quarter it's an headwind and that it is quiet significant to the tune of 4%. In the fourth quarter it's going to be even more than that like just as I said earlier and I was talking EPS, but in the fourth quarter the dollar last year was $0.88 and its trading at dollar to now that's a whooping increase, and that's having a direct impact on our reported revenues. Right on a reported basis we will have a larger impact from exchange in the fourth quarter than we did in the third quarter this year, and I mean if you want to try and put it in prospective to try and understand it, we actually had a slight positive in the first quarter of this year, and we will have almost double the impact in the fourth quarter from exchange as you assume it stays in this like dollar, $3 to $4 range, so it's... that's why I try to strip it out when I do my explanation to have apples to oranges, otherwise it's so variable.
Unidentified Analyst
All right. Thanks for your time, guys.
Operator
Thank you. The next question will be from Randy Cousins of BMO Capital Markets. Please go ahead.
Randy Cousins - BMO Capital Markets
Good afternoon. Jim, I wondered if you could, you got the first boat coming into Rupert. I wonder if you can answer two questions for us. Can you give an indication, I guess this calling into three ports: Rupert, Vancouver, and Seattle. How many of the boxes are going to be dropped or what percentages of the boxes are going to be dropped in Rupert and how many of the boxes are going to be making their way into the United States versus staying in Canada?
James M. Foote - Executive Vice President, Sales and Marketing
Well, I think that what we are looking at right now in terms of just dealing with TEUs, at least for this first call, we are looking at a discharge of about half the boat, and in terms of the final destination for those boxes, my original plan here was to have about somewhere between 70% or 80% of that going into the U.S. I have not, to be honest with you, seeing the final manifest, but I would assume that they are still in that range.
Randy Cousins - BMO Capital Markets
And has COSCO or Hangen given you a sense as to sort of how they are seeing that service developed or what they are looking at in terms of order flow over the balance of this quarter and into 2008?
James M. Foote - Executive Vice President, Sales and Marketing
Well this is kind of... the run rate... well to be honest, I'm very excited about the first call that the volumes are this high to be honest with you, because this is kind of the run rate that we were looking at to kind of kick off the service so to speak, and to have it there on the first, and appear to look like on the next vessel, that's a good sign, there's clearly in the shipping community, either the manufacturers or the receivers of freight desire to want to use Prince Rupert because of all the benefits that we talked about, congestion-free, etcetera. So it's not only the steamship companies that have been there to look at it but the big box stores and everyone else has been up there as well. So it looks good so far and we are on track here and very excited.
Randy Cousins - BMO Capital Markets
So you are not seeing any... FX the run of the Canadian Dollar have you priced this in US dollars? You have not seen an FX impact in terms of the viability of Rupert?
James M. Foote - Executive Vice President, Sales and Marketing
No, no I mean it's... we certainly had anticipated the volatility in the dollar not to this extreme and had marketed and priced the product accordingly.
Randy Cousins - BMO Capital Markets
Great, that's good news. Second question and my last one, I wonder if you guys could comment on the CTA proposed with reference to the Hoppermann [ph] and how it's going to impact the results both this year and I guess next?
James M. Foote - Executive Vice President, Sales and Marketing
Well, this year the decision of the CTA has been safe, so I think it's not going to have any impact into this year, but the government is on the record that they think that the estimate for the maintenance adjustment is about $2 a ton and so there's going to have to be consultation and technical analysis with the CTA to arrive at that number and it could be up or down around $2 a ton.
Randy Cousins - BMO Capital Markets
And what would that mean to CN?
James M. Foote - Executive Vice President, Sales and Marketing
I forget the exact number but I recall it on the order of $20 million a year or so.
Randy Cousins - BMO Capital Markets
Okay thank you.
James M. Foote - Executive Vice President, Sales and Marketing
Okay.
Operator
The next question will be from Scott Flower of Banc of America Securities. Please go ahead.
Scott Flower - Banc of America Securities
Yes. Good afternoon all. Just wanted to see... obviously this has changed a lot more than anyone thought on a change rate but obviously the exchange rates tend to on a lag basis affect a lot of the product loads, and that tends to take to place every six or nine months. I'm just wondering there seems to be a little bit of an less skew in your business right now with the West obviously has continued strong with the bulk in the East for all sorts of reasons is a little weaker. Does the currency shift accentuate that? Where does currency actually, assuming it's not just reported financials but in effect product flows obviously paper and perhaps pulp and there are products like industrial that get impacted in and how can you actually manage some of the operational challenges if you get a skew of business stronger in the West, a little bit weaker in the East?
E. Hunter Harrison - President and Chief Executive Officer
Well, Scott, you know that has been the challenge for us in the quarter, where we've hit very, very strong business segments in Western Canada in the bulk businesses. It's that they have been coming at us very quickly, you know when some segments like our coal business etc. we are 20% ahead of what we had budgeted for the year. So we have been working very hard and diligently there to meet our customer demands for the significant growth we are seeing in the west.
Now the East obviously does not have the similar characteristics in terms of its markets and therefore it's heads have been softer to begin with, and before the dollar appreciates take a look at the issues associated with the softwood lumber agreement where a lot of the lumber had already been manufacturing, had been transitioning from Eastern Canada to Western Canada, and now paper manufacturing is clearly impacted by the exchange rate, because there is clearly you know, a manufacturing it done in the Canadian dollars and a market for the product in U.S. dollars and there have been cutbacks and there have curtailments by our customers, five of which were new in the third quarter and unless something happens with the exchange rate, those shutdowns could be of a very long duration. Our challenges to hustle around and find new opportunities to take their place in Eastern Canada, and that's what I challenge my sales team to do everyday, and I am optimistic we will find new business opportunities in the East to grow just as fast as we have in the West.
Scott Flower - Banc of America Securities
How can there... I mean obviously it is just an infrastructure issue or is there anything tactically you can do operationally to try to in addition to Jim getting his sales team to try that to get back to try to manage that skew, which looks like it may get worse before it gets better?
E. Hunter Harrison - President and Chief Executive Officer
I mean it's not... I mean it's a clear to visit, Jim described between East and West. We were just a train size in the East. We have taken pairs of trains off in certain market. We rerouted traffic between Toronto and western Canada, different route scheme so the whole operating plan affectively in Canada is being redesigned and has been redesigned as we moved into this overtime. So, as we go into write now we are heavy in the grain. We are heavy in the potash. We are heavy into all the bulk commodities in the West. But that's the way the model adjusts accordingly, so from that standpoint it's relatively manageable. Now, you have to fixed assets, you've got people in place for the business. You've got locomotives there, you've got cars there, but from a variable cost standpoint it's certainly manageable.
Scott Flower - Banc of America Securities
And the last question I'll let someone else have had it I know that Claude mentioned in its discussion of car hire obviously that both in terms of lumber car is going less sale into the U.S. as well as some improvements in U.S. when should we expect some of the car hire income issues to last will that be fourth quarter because if I look at last year your comp seem to get easier in the fourth quarter is that going to be something we will continue to see into the first half of next year I an just trying to get a sense of when should I think about the car hire income issue getting more normalized?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Well I mean there is two things. One, if you just look at it from a just the last basis or number two is when the forest products comes back stronger and so you might have a double affect, I mean I start to read it the same thing that you'll all read about the lumber picking up fourth quarter of '08,first quarter of '09 when the predominant one largest area that is clearly centre beam cars, lumber cars which are a quite expensive cars standpoint I think we have like 1,800 part, as we speak, so if you can look at a car that's getting $25 or $30 a day and you get 1,800 on part well if you start laughing on these quarter same time the business picks up you will see a big swing in the car hire accounts.
Scott Flower - Banc of America Securities
Alright. Thanks very much
E. Hunter Harrison - President and Chief Executive Officer
Yes, sir.
Operator
Thank You the next question will be from William Greene of Morgan Stanley. Please go ahead.
William Greene - Morgan Stanley
Yeah. Hi, good afternoon, I am wondering if you would know the answer to this and that is can you tell how many car loadings were affected by the change in currency, in other words not thinking about the revenue per car impact from currency, but how many car loadings maybe didn't go this quarter as a result is that some thing that you can tell just looking at what shutdown on the lines this quarter?
Claude Mongeau - Executive Vice President and Chief Financial Officer
That's very difficult I don't think it's just real vague kind of number that we look at that we think the dollar is the overall impact and how much of the dollar or how much of the economy, how much of the shift that very, very hard to determine.
William Greene - Morgan Stanley
Yeah, that's right I just thought to ask it anyway. So, then as a follow-up some of the questions asked on productivity, if we look at things on a cost per GTM basis it actually went up by almost 6% this quarter excluding fuel, and so I am wondering if, if it's sort of a sign that maybe that's just is that all mix or is that a sign maybe some of the productivity efforts that CN has been sort of announce for so longer, you've kind of gotten as far as you can on that without volume growth there is not much more you can do?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Well you know, I don't if the volume growth, I mean I think it's, number one it's return of volumes, the issue become when you gear up for certain volumes when times are good and hard times happen, you can't just give over the assets, that you bought, okay, you've got locomotives part, you've got cars part those beings it can impact, now if you can peal back and look more when you start to touch the volume out of the numbers the productivity number all continue to improve. So, it's more of a volume driven issue then it is anything then productivity. Now having said that I think we said to you last year that we were 58 or 62. We'll probably not going to 50, so in as we've said before we'd like to grow this business and what we get better economic conditions at low favorable dollar in forest products housing starts and those being, we can but I don't think if any sign or any slippage from a productivity standpoint.
William Greene - Morgan Stanley
Okay. And then Hunter one last question for you just you've now done a number of acquisitions over the years, is there a lot left in terms of small acquisitions that you can tuck-in here, and how do you think of about acquisitions that are non-contiguous?
E. Hunter Harrison - President and Chief Executive Officer
I am not sure that, number one once that we potentially be that are non-contiguous are very limited number one. Number two, I don't think that necessary an ingredient, we've said we do a pretty good job of railroading, if we can buy a railroad the right price and make a buck out of it. You know we have started to take look at that but obviously, the small niche acquisitions, given what we have done, I mean we have done now about $7.5 billion since '95, they are running down. So with the exception of a larger transaction, those things are not going to be available like they have been.
William Greene - Morgan Stanley
Thanks for your help.
Operator
Thank you. The next question will be from David Newman of National Bank. Please go ahead.
David Newman - National Bank
Good afternoon, gentlemen.
E. Hunter Harrison - President and Chief Executive Officer
Hi David.
David Newman - National Bank
What do you anticipate the fuel headwind could be on the top line in percentage terms in Q4 and as looking out in 2008, and would you anticipate that there be any pushback in your customers, given the tougher economy, especially given you guys have taken 4% price increases?
E. Hunter Harrison - President and Chief Executive Officer
Right. Before I answer that... I want to about it look [ph], customers pushback at whatever area it is okay? They don't like 1%, they don't like 2%, they don't like 3%, they don't like 4%, so you know it's a marketplace to work out there. And the customers that are using this or using is what we get, all brings in the best service with the best value. If we don't do that we are not going to be affecting price increases.
David Newman - National Bank
Does the bottom get tougher though, Hunter?
E. Hunter Harrison - President and Chief Executive Officer
Well it's tough today, tough last year, when shippers, and I love them okay? That's why we are here. But let me qualify with that, we may have gone for 20 years without price increases and then if we walk in the door and say you got to start taking increases, it doesn't set really well with some of them. But you are in the Canada and you are in the U.S., but that's the kind of the market that it works.
Claude Mongeau - Executive Vice President and Chief Financial Officer
In terms of revenue generated from fuel surcharge in the fourth quarter, it shouldn't reverse itself from the third quarter, as the price that's tied to calculate the fuel surcharge will be higher in the fourth quarter of 2007 then it was in 2006. I think the crude was up 8% or something like that in the fourth quarter and I just mirror exactly what Hunter said, customers would always like to see lower rates.
David Newman - National Bank
You should see a bit of a negative spread of $85 are correct, WTI? Until you catch up I guess in the New Year?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Yes there's two month lag. The 8% that Jim was quoting is on the basis of the prices during Q3 which will by and large for the first two months dictate our fuel surcharge in the fourth quarter.
David Newman - National Bank
Right. And last one if I may, guys. Just in terms of, obviously the long term impact of the exchange rate on the Canadian manufacturing and the housing downturn, does this change your strategy at all especially related to the acquisition twist? In a perfect world what would you like to do I guess?
E. Hunter Harrison - President and Chief Executive Officer
We seldom stay in a perfect world. I don't think... I think what we have to do is adjust our strategy to markets. I don't think we are able to stretch that strategy and I think to some degree we go through these times and we learn our lessons going forward about things change. And I think we've got a pretty solid portfolio, pretty diversified and if we talk about in January we look at the annual result and look at the headwind we are going to have to compete with, overall for 2007 and have a flat year if that's the case. Just hypothetical that's going to be all American. And when we get a little picked up in Rupert, it's just the niches kick in from the J, a little bit. I don't think the dollar's going to stay here, I don't think housing starts are going to play one-on-one in the U.S., and things kick in, but we are not in this kind of business you are not able to all of a sudden to shift your strategy overnight to adjust the market.
David Newman - National Bank
Okay very good. And just last one, it's on guidance. The guidance for the full year, is that based on the $0.93 or the $0.96?
Claude Mongeau - Executive Vice President and Chief Financial Officer
We're guiding looking out to the current environment, and we see the exchange at parity and that's what we were guiding on.
David Newman - National Bank
No, I mean for the quarter results this quarter, Claude, is that based on the $0.93 or the $0.96?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Yes, $0.93.
David Newman - National Bank
$0.93 very good. Thanks gentlemen.
Operator
Thank you. The next question will be from Tom Wadewitz of J.P. Morgan. Please go ahead.
Thomas Wadewitz - J.P. Morgan
Yes, good afternoon. It's Tom Wadewitz.
E. Hunter Harrison - President and Chief Executive Officer
We know you, Tom.
Thomas Wadewitz - J.P. Morgan
You know the name. Let's see...on the...yes, I think you started to comment a little bit on '08, but when you look at some of the pressures in fourth quarter that look like you drive earnings down a little bit year-over-year in first quarter, how much of the continues in '08 and I mean is it, you know is it reasonable to think that you get some good growth in '08, or conditions don't change a lot, are earnings maybe flatter down in '08?
E. Hunter Harrison - President and Chief Executive Officer
Well, I mean Claude's going to comment on this more to get more specific. But I can say this, this kind of environment is extremely difficult to forecast, what's going to take place. We had, I don't think any of us entirely, I don't think anybody in the world that will see Canadian dollars at the rate of a dollar three, almost a dollar four a rate. I certainly didn't see it. I didn't see the housing starts like this, so you know there is lot of big questions going into 2008 which we are going to have to qualify whether we stayed batted, we just slightly don't know, and some I can help a bit if we can get some guidance. We might have to give it in ranges, but I think the fundamentals are there. Claude is going to talk you about some of the challenges we are going to have. We are going to get better, in some areas from a productivity standpoint and it's nothing that I think, I think we can deal with it. But, once again it's a very, very volatile affect to the environment.
Claude Mongeau - Executive Vice President and Chief Financial Officer
In fact I would just basically echo Hunter's comment, at this juncture they are calling the economy is a tough call, We think that the unbalanced the housing issues will not have too much contagious affect and that we will be able to rebound at the... soft landing in 2008, but you could see it going the other side and leaving to the side for a moment the high Canadian dollar and fuel price it's just very difficult to have a clear direction into next year.
For sure if the dollars stays at parity of it or above just that on a Canadian dollar reported EPS basis is a headwind of 5% that we have to face. So, we are cautious about next year. We think we can come in with the EPS growth if the economy holds up. Is it going to be a double-digit, probably not, is it going to be a high single-digit, at this juncture we are not providing a high or formal guidance, we just like to wait and see what the economy does and provide you more color at the first quarter earnings call.
Thomas Wadewitz - J.P. Morgan
Okay, that's fair enough, I know it's pretty tough to tell it from here you know especially giving from the economy, what about the cost side you've got a couple questions on that. Are there places where if volumes don't pick up you can push harder on headcount or are there other areas you can pull a little bit of a time lag, you can go after it even harder on the cost side?
E. Hunter Harrison - President and Chief Executive Officer
Well there is clearly I am not did the headcount more in costs, we might, if it's smart, if it lowers there are calls that raise in the headcount, I am not adverse to doing that. We clearly with the J acquisition and with the capital investment we are making amidst this over the last we have made number two years and completing in 2008. Clearly, will give us a lot of savings in the U.S. internal operation. It will give us car velocity improvements and a lot of things there. There is a continuing initiative with siding initiatives in further in western Canada. Keith Creel is looking on some issues and reroute the traffic between east and west. We've got distributed power coming on with locomotives where we can sustain longer trains coat in colder weather. We've got some air repeater cars so there are a lot initiatives and this operating group shines the greatest when times are the toughest and so we will overcome.
Thomas Wadewitz - J.P. Morgan
Okay, great. And then the last one I will pass along to someone else. On the Preentroopers forecast I think back in May there was some good enthusiasm, you achieved 500,000 TEU in 2008. You mentioned the Hangen doing some volume on the COSCO ships. Do you think that still possibility in '08 or is that... how would you characterize 500,000 TEU go for Rupert innovated in terms of your outlook now?
Claude Mongeau - Executive Vice President and Chief Financial Officer
I think that the guidance that Mr. Norgan has provided, which I have enforced is that we would have $100 million of new revenues in the first 12 months so there is what we are anticipating beginning in October, in addition to that I am still what I have said was what I had hoped for was to have the remainder of the capacity sold out at Prince Rupert and what I've also said is that we need one more customer in there in order to one more big customer in there to have that capacity sold out, and I would hope that we would get that sooner than later. We're still working very hard. We still have a tremendous amount of interest and if we get that customer signed at sooner than later it will be additive to their $100 million in the first 12 months that Bob has talked about.
Thomas Wadewitz - J.P. Morgan
So, you're still comfortable with $100 million for the first 12 months?
E. Hunter Harrison - President and Chief Executive Officer
That's in the bag with this customer, yes.
Thomas Wadewitz - J.P. Morgan
Okay, great. Thanks for your time.
E. Hunter Harrison - President and Chief Executive Officer
Thanks, Tom.
Operator
Thank you. The next question will be from Walter Spracklin of RBC Capital Markets. Please go ahead.
Walter Spracklin - RBC Capital Markets
Thanks very much. Claude, you know I just wanted to make sure because it was real mid [ph] time last year that you sort of started guiding us for '08. Did you say first quarter next year is when you'd expect to come out with your early guidance?
Claude Mongeau - Executive Vice President and Chief Financial Officer
Yes. That's the fair approach. The things, Walter, reality is the subs call the economy. Everyday I look on the screen the dollar is up $0.02 and fuel price is sky rocketing. At this juncture we just like to see a little bit an environment that's little less volatility for us to be able to provide you with some guidance, and so at this juncture we'll just reserve and do that in the early part of next year.
Walter Spracklin - RBC Capital Markets
Okay.Move on to Jim. Jim you had mentioned there was a shift from Halifax to Montreal. I know Hunter you've talked a lot about Halifax as an important gateway. Are we seeing this as shift as a permanent thing, part of a longer term trend or you are still optimistic with respect to he Halifax as a part?
James M. Foote - Executive Vice President, Sales and Marketing
Well, Halifax has a great potential for us and we continue to market it very aggressively with the new port players out there. We have owners of the terminals and the port authority etcetera, so we think it's got great potential. This shift from Halifax to Montreal is a result of industry consolidation, one steamship company buying another steamship company and taking advantage of certain different routings of all sorts, so no long-term implications.
Walter Spracklin - RBC Capital Markets
Okay, but I guess Halifax has always been pretty good potential but in terms of the growth and in terms of capitalization hasn't always come up to expectations, anything that would indicate that Halifax is any problems there or is it just continue to be optimistic?
E. Hunter Harrison - President and Chief Executive Officer
I know there is no problem in fact it's a very well run port and there's certainly been new investor investments by new players into that, everybody is extremely optimistic about the port of Halifax, as more and more trade with North America comes through the Suez, as manufacturing picks up in India and in that area everybody is extremely optimistic that Halifax will be a huge player in that business - so much so that other people are currently looking at developing new port facilities on the East Coast because they don't believe that Halifax is going to have the capacity to accommodate the growth.
Walter Spracklin - RBC Capital Markets
The last question just on Prince Rupert, you mentioned getting up to full capacity through the year, are you considering any options in terms of the strategy used? I know you do want to get that 70% to 80% U.S. destination, is there any ideas toward or thinking toward being lenient on the first little bit in terms of getting some utilization up at the expense of perhaps not necessarily at the high ratio of U.S. or are you going to stick to that target ?
E. Hunter Harrison - President and Chief Executive Officer
No, I just, you know, we don't see any reason to change our marketing strategy and we believe that we have a premium product, a gateway on the West Coast of North America that doesn't exist anywhere else and we're going to continue to market our product just as we have.
Walter Spracklin - RBC Capital Markets
Okay that's it from me. Thanks very much guys.
Operator
Thank you. The next question will be from Ken Hoexter of Merrill Lynch. Please go ahead.
Ken Hoexter - Merrill Lynch
Hi. Good afternoon. It's Ken Hoexter.
E. Hunter Harrison - President and Chief Executive Officer
Hi, Ken.
Ken Hoexter - Merrill Lynch
Claude, can you just talk a bit about what happens if the dollar actually gets a bit worse on volumes. Obviously, nobody would've guessed the $1.40 is now down to $1.20 now down to $0.97, so what happens if we end up and we're talking about a $0.90 or $0.88 dollar the reverse way versus the year ago, how does that impact the business?
E. Hunter Harrison - President and Chief Executive Officer
Well don't mix it up on me, because I am paying you a dollar and I live in Canada so, but the, it's who knows, we think that the dollar has run up ahead of its fundamentals a little bit and that it should pull back. The reverse is also a possibility and one could argue that it would move to $1.05 say in exchange rate. I think the issue that we face then, it's straightforward from a conversion standpoint.
For every penny that the Canadian dollar appreciates, we lose about $0.02 of EPS. The tougher call is what happens to the number of manufacturers, our customers, the people who are selling into the U.S. markets, it's tough. It's tough for the dollar, it's a lot tougher at $1.05 or $1.10. So I think you would see more casualties and we'll have to be even more nimble to work with our customers in that kind of an environment. I just don't personally see it. I think that what you're going to see is the Canadian dollar gradually coming back to more reasonable levels, but it's very tough to call.
Ken Hoexter - Merrill Lynch
But just in case this does head in this direction, are you then talking about mostly cross-border traffic, and then what fields are mostly exposed? Just the forest product business? Can you kind of direct us to which businesses we could see impacted more than others?
E. Hunter Harrison - President and Chief Executive Officer
Well, by the time it gets to $1.05 we will be looking at business that is south-north and shipping Budweiser into Canada. If you see the dollar go much higher like that, to Claude's point it is going to be produced somewhere in North America. And if is not produced in Canada, the chances are it might be produced in U.S., you can stuff that U.S. over the Canada instead of vice versa. So there's the point where manufacturers can only survive so long in that kind of environment. So we just... if that's the case I don't happen to think that's going to take place, but if it takes place there could be some fundamental shift.
Ken Hoexter - Merrill Lynch
Okay. Right. I guess back over to Jim on the congestion at Port Valley Long Beach obviously was... it was actually volumes I think and the imports were down 1% last month. If we continue to see kind of some loose capacity at the Port Valley Long Beach, does it make it less likely for you to be able to get that upside to your 100 million target in getting a second committed customer? Are they in discussions about thinking about what happens when volumes actually do pop back up and they do get ahead of the congestion or are they saying hey nothing's wrong right now why even think about it?
James M. Foote - Executive Vice President, Sales and Marketing
I think the lack of congestion in LA Long beach caused us to... caused some customers to be not as eager to make a complete shift to Prince Rupert, and therefore my comments earlier in the year that I was pretty confident that I would have the facility sold out this year haven't come to reality I think everybody expects is that as we move into 2008, which is why more and more vessels continue to go all water out to East Coast ports to avoid the west is that this congestion issue will return and that will make Prince Rupert again not only more attractive, but a necessity, which is why I said earlier its not only the steamship companies that are interested in going there, is there manufacturers and the receivers of the product that they want to make sure they can get in there markets and why they are eager to use Prince Rupert. And so, in 2008, if we don't get it done this year I still think that we will still get it for more lager customer and there we will have the facility sold out and we will continue to progress and be aggressively pursue expansion of the port of Prince Rupert.
E. Hunter Harrison - President and Chief Executive Officer
I think Ken can further that point is this, I think we will find and customers will see and we are going to see right soon that even without congestion in Long Beach, Prince Rupert needs Long Beach from Asia to Chicago for example all things in it's a premium service and once its sold out its sold out there is not an option then when there is congested in California saying now we are going to Prince Rupert because Prince Rupert we think will be sold out by the end and I think to a degree it deals more from a pricing standpoint then.
Ken Hoexter - Merrill Lynch
I think I want just a quick clarification I just don't understand Jim it was the on east side Halifax you are saying its switched to different ports it's not an issue that trucks are getting more competitive and it's going half of rail onto truck is that correct or is that our truck spending marketplace?
James M. Foote - Executive Vice President, Sales and Marketing
Yes. That's so I suppose to discharging their cargo at a port... at a terminal in Halifax is taking that vessel all the way into the port of Montreal.
Ken Hoexter - Merrill Lynch
Okay. Thanks for the time.
James M. Foote - Executive Vice President, Sales and Marketing
Thanks.
Operator
Thank you. The next question will be from Bill MacKenzie of TD Newcrest. Please go ahead.
Bill MacKenzie - TD Newcrest
Thank you. Jim, can you just talk about the other revenue line little bit it was the driver to the revenues in terms the year-over-year growth. Just wondering if you can give us a little bit of color in terms what's going on there and what is our CN worldwide any of the factors that are driving that the improvement there?
James M. Foote - Executive Vice President, Sales and Marketing
Yes. It's at the top of my head, I think it was the growth of $22 million a year-over-year by half of that comes from the non-rail logistics businesses growth warehousing, trucking etcetera where, as you know we are aggressively pursuing growing that business and the other half of that comes from a slight change in the methodology of accounting for the revenues associated with our cold dock and iron ore dock where the revenues from that used to be up in the business unit item and they are now down in the other revenue although we did not restate the prior period because it was a little you know one little small little change.
Bill MacKenzie - TD Newcrest
Okay. And I think from a business perspective that's driving that significant growth that you saw this year this quarter?
James M. Foote - Executive Vice President, Sales and Marketing
Well beside the accounting change and the growth in the non-rail business segments like warehousing and trucking, no, that's what it is.
Bill MacKenzie - TD Newcrest
Okay. And so just a question on in terms of the asset sales is there are any sort of longer term impact on earnings from entering into sale lease best transaction or any lost sort of other revenues from the sale of these assets?
E. Hunter Harrison - President and Chief Executive Officer
Our other income will be lower a little bit if we conclude the sale of EW West, but the central station, the lease expense that we will have going forward will be offset by the profit so that we would differ overtime on the transaction itself, so the sale lease back component of the transaction as I preferred, amortize gain, which is about the same as the increase lease expense.
Bill MacKenzie - TD Newcrest
Okay. So, no bottom line materially EPS impact?
E. Hunter Harrison - President and Chief Executive Officer
No actually it's really... those are two good deals the way I like them, but the cash, no impact on the P&L.
Bill MacKenzie - TD Newcrest
Okay, great. Thank you.
Operator
Thank you. We have reached at the end of the question period at this time I would like to turn the meeting back to Mr. Harrison.
E. Hunter Harrison - President and Chief Executive Officer
Thanks, thanks Joe, and thanks so much for joining us we appreciate it.
Operator
Thank you. The conference has concluded at this time you may disconnect your telephone lines. We thank you very much for you participation, and have a great day.
Copyright policy: All transcripts on this site are copyright Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
- To read the full transcript on Seeking Alpha, click here »
