Canada’s largest railway says it’s on track to set a new record for total grain volume moved in a crop year.
Sean Finn, executive vice-president of corporate services with Canadian National Railway, said another strong month for grain movement in June suggests the company could set another new crop-year record in 2019-20.
The company’s previous crop-year record was set in 2018-19.
“With one month to go (in the 2019-20 crop year) we’ve already moved 26.9 million metric tonnes, which is up from 26.5 at the same time last year,” Finn said.
“Our record for the crop year is 27.7 million metric tonnes … which is last year’s record … and we were already at 26.9 (by the end of June).”
“So with four more weeks to go … we should be able to exceed it.”
When it comes to grain, CN has been on a roll for the past three or four months.
This year, the company set a record for the best June ever, with 2.7 million tonnes of grain moved, versus the June record of 2.44 million tonnes.
It also set new records for the best quarter ever with 8.15 million tonnes moved, compared to the previous record of 8.08 million tonnes, and the best half year ever with 15.0 million tonnes moved compared to the previous record of 13.9 million tonnes.
Finn said some of the company’s recent success in grain is the result of a decline in demand from other sectors due to COVID-19.
Reduced shipments of crude and containerized consumer goods, for example, has freed up additional rail capacity for grain shippers.
But Finn also pointed to CN’s recent investments in railway capacity, as well as capital expenditures by other player in the grain industry, including G3, which opened a new high throughput export terminal in Vancouver earlier this year.
He also pointed to the company’s annual grain plan, which is mandated by government.
Both CN and its main competitor, Canadian Pacific Railway, are required by law to submit annual grain plans every July, before the beginning of the new crop year.
The grain plans outline railway company plans to move Canada’s grain over the following 12 months and set targets for grain-car spotting and overall railway service to the grain industry.
Finn said the requirement to submit an annual plan has resulted in more planning and consultation with others in the supply chain.
In addition to discussing harvest expectations, demand and car-spotting targets, supply chain partners also review the plan monthly and discuss other issues ranging from supply chain disruptions to capacity needs.
Improved consultation has allowed everyone in the supply chain to work more collaboratively.
“The fact that in the last two years we’ve had this grain plan, I think has been very helpful and very healthy, both for the railways and for the overall supply chain to have that open and frank discussion about the importance of making sure we have the capacity,” Finn said.
CN’s 2020-21 grain plan, due to be tabled shortly, is expected to contain a slight increase in projected car-spotting targets.
As far as the larger economy is concerned, the company is looking for economic conditions to improve in the late summer or early fall.
“We’re expecting some form of recovery,” Finn said, but pace of the recovery “will depend very much on the so-called second wave (of COVID-19).
“It’s hard to say today but … we’re trying to look optimistically towards late summer or early fall to see a steady recovery.”