Canadian Pacific says it aims to double rail capacity on its northern mainline through improved logistics
Canadian Pacific Railway is committed to increasing western grain and oilseeds shipments, but it said government regulation is not the way to accomplish that goal.
“We don’t believe that regulated policy is the best way to move Canadian grain,” said John Brooks, a CP vice-president in charge of grain. “We think its hard working railroaders, hard working grain companies and producers doing their part to grow it and bring it to terminals.
“Ultimately, the collaboration between the three … is what needs to be done to move grain.”
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Heading into the 2015-16 crop year, CP is sending messages that it is committed to providing better service to the grain industry.
During the past two weeks, it has shared details with the media on how it plans to expand network capacity and ensure that service to grain shippers can be increased in step with an estimated two to three percent annual growth rate in grain and oilseed production.
In a media release Aug. 11, CP said the introduction last year of a Dedicated Train Program for large unit-train grain shippers has improved efficiency and velocity in the supply chain and gives shippers greater clarity and control of hopper car supplies.
CP’s emphasis on the grain business comes at a time when crude oil rail shipments have significantly declined. During the first half of 2015, CP’s freight revenues from hauling crude were down by about 30 percent compared to the same period in 2014.
In an Aug. 11 interview, Brooks said CP has launched initiatives aimed at increasing Canadian grain shipments.
Top among those is a project that has the potential to double the overall rail capacity on CP’s northern Canadian mainline from Edmonton to Winnipeg.
Brooks said the multi-year project, already underway, will add centralized train control to manage train logistics and improve velocity.
The company will also add new and longer sidings along the mainline, allowing more and longer trains to travel at greater speeds with fewer stops.
“It’s essentially going to give us the ability to almost double capacity on our north mainline through (Western) Canada. It’s a big deal.
“I think it’s a grain area that CP sees a lot of new opportunity in,” he added.
A second part of CP’s strategy focuses on moving grain through non-traditional routes to markets in the United Sates and Mexico or to alternative U.S. ports.
The addition of centralized train control systems between Moose Jaw, Sask., and Minneapolis, Minnesota, for example, will increase overall capacity for grain movement into the U.S. to destination mills or Great Lakes ports other than Thunder Bay.
“I think maybe historically, CP could have done a better job of eliminating that border and trying to open up more markets and more options for our shippers,” Brooks said.
Capital investment will play a key role in modernizing CP’s network.
Brooks said the company is on track to spend roughly $1.5 billion on maintaining and improving its North American network assets in 2015. That’s about 21 percent of the company’s annual freight revenues.
About half of that money is expected to be directed toward maintenance and replacement. The other half will be used to expand capacity through new projects, new technologies and new assets, including rolling stock.
Other supply chain stakeholders, including grain companies, have also been investing to expand throughput capacity at export terminals and country delivery points.
New concrete elevators are using modern loop tracks and rapid load-out systems that can fill a 134-car train in one work day.
Existing facilities are also expanding throughput to move more tonnes more quickly.