CP says grain movement improving

Written by Stuart Chirls, Senior Editor
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Canadian Pacific Railway reported year-to-date shipments of grain through Week 31 were up 3%, or approximately 400,000 metric tons.

At the same time, farmers in western Canada cite a shortage of grain railcars that is preventing their crop from getting to market.

The Calgary-based carrier said that while “extreme” weather hampered the supply chain through much of February, its network is now starting to recover.

Week 31 saw grain shipments increase by 16% week-over-week and that its network is getting more fluid by the day.

The railroad spotted nearly 50% more domestic empty cars from the prior week, and said velocity is also improving, with train speeds up approximately 10% this past week compared with mid-month.

“We are optimistic that with the weather turning in our favor, our singular focus on delivering safely for the supply chain, and the re-opening of the Port of Thunder Bay, that we are on the road to recovery,” said Keith Creel, CP President and Chief Executive, in a release. “While our challenges have been significant, they are different than that of [Canadian National] and the success of the supply chain depends on both railroads running at optimum levels.”

Recently the railroad experienced “unprecedented cold” (60% percent colder, 78% more days below -25 C (-13 F) and snow along with some significant line outages. “Additionally, CP is experiencing unprecedented and unexpected demand being driven from dual rail-served territories in the northern catchment areas of our network. In spite of significant weather challenges our shipments are up 30%^ crop-year to date in this area.”

The carrier said the grain was originally forecast at around 65 million metric tons, but will end up being closer to 71 million tons – a near 10% difference, with much of that increased production occurring in the northern catchment area of the Canadian prairies due to dry conditions in the south.

“These short-term challenges are episodic, not systemic, and we expect our network to improve with improving weather conditions,” Creel said. “We are still moving more grain than we did last year and we are well positioned to have a great year overall across most commodities and lines of business.”

The company’s Dedicated Train Program (DTP) has 15% more subscribers this year, DTP cycle times were on target and generally, traffic along CP’s network was moving well, prior to February. Year-over-year comparisons would be better if not for a very slow start to the crop-year for grain sales. A portion of CP’s dedicated train capacity also sat idle for most of August and September, and some shippers struggled to fill their committed freight until November.

The railroad continues to add both crews and locomotives to support volumes across all commodities and urges the senate and government to move forward on Bill C-49 to bring some further certainty to the grain supply chain moving forward, specifically relating to new hopper car investment.

Grain farmers complain that CP and CN have failed to deliver sufficient railcars to move grain, with the backlog at a reported 15,000 cars. The railroads want the provincial governments to move forward with funding to expand the pool of cars.

In 2013-14, Canadian farmers lost an estimated $8 billion due to the lack of grain movement.

“We have 550 new people, across all crafts, in various stages of the hiring process, 100 additional locomotives, which will start being integrated into the fleet this month and into the spring and summer, and we have earmarked between $1.35 billion and $1.5 billion in capital improvements this year that will further improve the flow of goods across North America,” Creel said.

Categories: Class I, Freight, Freight Cars, Mechanical, News Tags: , ,