Canadian Pacific Railway reported lower revenue and income in the second quarter but expects a stronger second half thanks to grain.
Reduced traffic dropped revenue by 12 percent and adjusted net income fell 23 percent to $312 million.
In a conference call with analysts, Keith Creel, president and chief operating officer, said CP expects a 68 million tonne crop, up from 64 million last year, but it is also aware of the potential for 70 million.
It thinks that through longer trains and better efficiency it can handle the volume.
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China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
“The day of the 112-car grain train of CP is done. We’re moving to 134 cars. Why are we doing that? Takes the same amount of locomotive,” said Creel, who will take over from Hunter Harrison as chief executive officer in July 2017.
CP has about eight percent fewer locomotives running this summer than last year but if warranted, Creel said more equipment is available.
“I’ve got almost 700 locomotives that are parked. I’ve got 4,000 grain hoppers that are parked.”
Harrison said the rest of the grain supply chain must match CP’s effort.
“So if need be, we’re going to put a scorecard of who’s doing what where. Here’s what rail is doing. Here’s what the unloaders are doing. Here’s what the loaders are doing. And we’re going to call a spade a spade.”
