(The following story by Jon Harding appeared on the Calgary Sun website on April 21.)
CALGARY — A year after announcing job cuts and in the midst of a China-fuelled boom for Canada’s rail shipping industry, Calgary-based Canadian Pacific Railway says it could soon go into hiring mode. “I would say we’re coming to an end of the ability to achieve efficiencies through workforce reductions,” Rob Ritchie, president and CEO of Canada’s second-largest railway, said in Calgary following yesterday’s annual meeting with shareholders.
“We’re obviously going to have to be growing the company going forward as the tonnage has improved.”
The railway last summer said it would cut 820 positions by 2005 in the wake of surging fuel prices, the soaring loonie and weaker grain shipments following a period of western Canadian drought.
But now the rail business is “strong across the board and being driven by two major cycles: A booming demand for imports from China and rebounding demand for Canadian commodities such as grain, sulphur and potash,” said Fred Green, CP Rail’s executive vice-president, operations and manufacturing.
The railway, which serves Canada and the U.S. Midwest and Northeast with more than 22,500 km of track, employs about 16,000 people, down from 19,000 in 1999.
“I believe going forward, opportunities are there to improve tonnage figures and we’re going to need people to do that,” Ritchie said.
He said an improving North American economy and the jump in demand for freight movement between Canada and China are expected to help boost sales 4% to 6% this year.
The railway’s profit for the year ended Dec. 31 was $398.7 million, down $97.3 million from 2002 but up $26.2 million compared to net income in 2001, the company reported.
The booming business with China is boosting revenues but it is also stretching the ability of CP Rail to meet demand for services on the West Coast, said Green.
CP Rail has come under fire from shippers who say the company has been unable to handle the jump in container traffic at the Port of Vancouver, Canada’s busiest port.
“We’ve moved a huge number (more) of containers this Q1 compared to the previous Q1. (The bottleneck) is not a capacity issue of us moving less, but rather it’s us not being able to move an absolutely huge number,” said Green.
Executives are working with customers to determine whether the jump in business with China is a blip or a long-term growth trend.