CP plans $500 million fleet renewal; cites MRE changes

Canadian Pacific Railway is planning to spend more than $500 million on new high-capacity grain hopper cars over the next four years.

The company announced its plan in a June 7 news release, adding that grain shippers can expect to see 500 so-called “jumbo” hoppers in CP’s fleet before the end of 2018.

All told, the company plans to order 5,900 new hoppers over the next four years, enabling the removal of all low-capacity hoppers — including all Government of Canada cars — from the company’s fleet.

The CP investment was announced just two weeks after Bill C-49 — The Transportation Modernization Act — became law in Canada.

In late May, rival railway Canadian National also announced plans to buy 1,000 new hoppers.

Both railway companies said investment-friendly provisions in Bill C-49 — including changes to the Maximum Revenue Entitlement formula — prompted the decision to invest in fleet renewal.

“We know farmers depend on us to transport their product efficiently, safely and reliably to market,” said CP president and chief executive officer Keith Creel.

“(Grain is) the largest sector of CP’s business by revenue, and we’re committed to continuous improvement for the benefit of our customers and the North American economy,” he added.

“These new railcars will revitalize our fleet and help cement our status as an industry leader in grain transportation for decades to come.”

CP’s fleet renewal plan will begin with an initial order for 1,000 jumbo hoppers cars from National Steel Car of Hamilton, Ont.

The new hoppers are shorter and lighter than the older, low-capacity hoppers and can carry more grain per unit.

According to CP, the new units will handle approximately 15 percent more grain by volume and heavier load weights.

The new cars also have a higher profile and frames that are three-feet shorter than existing hoppers.

That will allow more six additional cars to be placed in CP’s standard 7,000-foot dedicated grain train

The decision to invest in new cars is part of a larger CP plan to move toward 8,500-foot dedicated grain trains, consisting of as many as 147 jumbo hoppers.

At full capacity, an 8,500 foot train comprised solely of jumbo hoppers would be capable of moving 15,000 tonnes of wheat.

By comparison, CP’s current 7,000-foot grain trains comprised entirely of low capacity hopper cars has a maximum carrying capacity of 10,400 tonnes.

The new configuration would mean a 44 percent improvement, based on tonnes of wheat per train.

The new cars will also feature a three-pocket design that can be loaded and unloaded more efficiently than the old four-pocket government cars.

“We are excited about this significant enhancement to CP’s fleet,” said Andrew Paterson, president and chief executive of Paterson GlobalFoods. “With our growing network of facilities capable of handling 8,500-foot trains, this highly efficient hopper car capacity will benefit our supply chain and support the growth in volumes that we are pursuing in the competitive western Canadian marketplace.”

National Steel Car of Hamilton will manufacture the cars in CP’s initial 1,000 car order.

“I applaud Parliament for its passage of the Transportation Modernization Act, which supports the supply-chain innovation we’re announcing today,” Creel said.

“It’s a bill notable not only for this grain enhancement, but for enabling the use of data from locomotive voice and video recording equipment as a proactive measure to improve railway safety. This act is truly a step forward for efficiency and safety in Canada’s rail sector.”

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