Friday, May 09, 2014

CP CEO seeks discussions among grain interests

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Canadian Pacific Chief Executive Officer E. Hunter Harrison is calling for "direct face-to-face discussions based on facts are the best way to make progress on strengthening Canada's grain handling and transportation system."

Harrison's entreaty, made Friday, May 9, 2014, was issued in part because, he said, "The reality is that Canada's grain handling system is just not built to handle this record amount of grain and CP is moving all the grain the supply chain can currently handle.

"CP is moving grain in all available lanes but we need to move grain to fluid outlets with strong cycle times to move as much grain as possible as quickly as possible," Harrison said, adding, "This is a capacity problem and the Canadian supply chain needs to be searching for a capacity solution. Rail is only one element of the supply chain."

The CEO asserted, "We need constructive dialogue instead of the ongoing back and forth that is happening in the media among various parties. . . CP has reached out to customers and other stakeholders, including the Western Grain Elevator Association, and look forward to further constructive dialogue in person, rather than through the media. This way, stakeholders like the WGEA, would have a better understanding of supply chain realities and everything CP is doing to continue to move record amounts of grain."

Citing CP's recent moves and adjustments on the matter, Harrison noted:

• CP continues to meet or exceed the Government of Canada's Order-in-Council, which directed railways to move about 5,500 cars per week. This level of service was what CP committed to in its open letter of March 6th, before the federal government order.

• Versus a five-year average, CP has moved 15% more grain from September through April.

• CP grain volumes from September 2013 through April 2014 are up 10% compared to the same period last year.

• From March to April, 2014, after the extreme weather lifted, volumes were up 11% compared to last year and 14% over the five-year average.

• Added capacity from Winnipeg to Chicago this spring, which is supporting the strong demand for Canadian grain into the U.S.

Responding to suggestions that grain should have moved to U.S. locations to cope with extreme winter weather, Harrison noted that sending grain cars to a congested terminal such as Chicago during this past winter would have significantly impacted the supply chain's ability to move grain to the benefit of Canadian farmers.