(Source: CP Rail press release, March 7, 2018)
CALGARY, Alberta — Canadian Pacific Railway Limited continues to deliver overall for the grain supply chain with our year-to-date shipments, through Week 31, up 3 percent, or approximately 400,000 metric tonnes.
While extreme weather took its toll on the entire supply chain through much of February, CP’s network is now starting to recover. Week 31 saw grain shipments increase by 16 percent week-over-week and each day CP’s network is getting more fluid. CP also spotted nearly 50 percent more empties to the country in Week 31 compared to the week prior, a further sign of the incremental gains being made. CP’s velocity is also improving, with train speeds up approximately 10 percent this past week versus mid-February.
“We are optimistic that with the weather turning in our favour, 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 CEO. “While our challenges have been significant, they are different than that of our competitor’s and the success of the supply chain depends on both railroads running at optimum levels.”
The supply chain works best when all of the players are functioning at a high level. When one railroad struggles, or a shipper is dealing with a labour outage, or a vessel captain refuses to load in Vancouver due to rain – the entire supply chain suffers, just as it does when temperatures drop below -25 Celsius for long periods of time. Extreme weather and line outages impact all commodity movements, not just grain.
Each year, CP plans extensively for winter. Recently we have experienced unprecedented cold (60 percent colder, 78 percent more days below -25 Celsius) and snow along with some significant 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 percent crop-year to date in this area.
CP strategically plans each year for the upcoming crop, which this year was originally forecast around 65 million metric tonnes, but will end up being closer to 71 million metric tonnes, close to a 10 percent difference, with much of that increased production occurring in the northern catchment area of the 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.”
CP’s innovative Dedicated Train Program (DTP) has 15 percent more subscribers this year, DTP cycle times were on target and generally, things along CP’s network were moving well, prior to February. CP’s year-over-year compares would be even 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.
CP 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.
“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.