CN has ordered 1,000 high-cube grain hopper cars from National Steel Car, Hamilton, Ont., to replace aging equipment and accommodate increasing annual Western Canadian crop yields. The order closely follows the Canadian government’s passing of Bill C-49, the Transportation Modernization Act.
CN is buying new 55-foot, 8-inch jumbo hopper cars with 5,431 cubic feet of capacity. Deliveries will occur over the next two years. CN’s 12,000-car Western Canadian grain fleet is comprised of CN-owned hoppers, leased cars and private customer equipment. The new hopper cars will allow the phase out of older, lower-capacity cars from the CN-owned and leased fleet, which has an average age of more than 30 years.
“This substantial investment in higher-capacity-payload hopper cars, with up to 10% more capacity than the older generation, demonstrates our commitment to safely, efficiently and reliably moving the steadily increasing Prairie grain crop for our customers,” said CN Interim President and CEO JJ Ruest. “We clearly understand how important having an effective grain supply chain is to our nation’s reputation as a stable trade partner. With this week’s news of regulatory certainty, we can now make decisive long-term investments that will benefit the entire grain industry.”
National Steel Car Chairman and CEO Gregory J. Aziz said the company will hire more than 300 new full-time employees in Hamilton, bringing the number of new jobs to more than 550, following CN’s earlier order for 350 centerbeam lumber cars. NSC’s Hamilton facility currently employees more than 1,500.
Canadian Minister of Agriculture and Agri-Food Lawrence MacAulay said CN’s purchase “will help grow the agricultural sector by ensuring farmers are able to reliably get their products to market.”
“Canada’s grain hopper cars are rolling toward the end of their lives,” said Kyle Jeworski, President and CEO of Viterra, a Regina, Sask.-based marketer and handler of grains, oilseeds and pulses. “Over the past several years, Viterra has made significant, targeted investments in its country grain elevator network, and we welcome this major investment and commitment by CN to get Prairie grain to world markets.”
CN and NSC did not disclose a purchase price, which has been estimated at approximately $100 million, according to local news reports citing a source “close to the matter.”
Bill C-49, the Transportation Modernization Act, amends the Canada Transportation Act, changing, among other measures, “provisions respecting the maximum revenue entitlement for the movement of Western grain and require certain railway companies to provide to the [Transport] Minister and the public information respecting the movement of grain. Click HERE for additional information.