The number of grain cars in Canada’s aging federal hopper car fleet continues to shrink as more cars are removed from service due to age, damage and rising maintenance costs.
According to the federal government’s Hopper Car Fleet Annual Report for 2019, the number of federal hoppers in service dropped to 7,193 cars by Jan. 1, 2020, down from 7,749 cars a year earlier.
That a reduction of 556 cars, or nearly seven percent of the fleet, in 12 months.
The Hopper Car Fleet Annual Report is published each year by Transport Canada.
The Western Producer received a copy of the 2019 report earlier this month. The 2020 report isn’t yet available.
The availability of grain hoppers has been a long-standing issue in Canada.
In the early 1970s, after Canada had trouble accommodating large grain sales to China and Russia, the federal government began replacing outdated and inefficient box cars with federally owned grain hoppers.
The federal government acquired 2,000 hoppers in 1972 and during the next 20 years or so, the federal hopper car fleet grew to nearly 13,500 cars.
That number did not include hoppers owned by the Canadian Wheat Board or governments in Saskatchewan and Alberta.
Since then, the number of grain hopper cars in Canada’s federal fleet has been falling steadily.
As older cars in the fleet are sold, removed from service or sent to salvage, newer models have been brought on line to ensure adequate grain-hauling capacity.
In recent years, Canada’s two major railway companies have supplied modern, high-volume replacement cars on the condition that their capital investments would be accounted for in the railways’ maximum revenue entitlements (MREs).
The MRE is the maximum amount of revenue that a Class 1 railway is allowed to generate from moving western Canadian grain to market.
In May 2018, Canadian National Railway announced the acquisition of 1,000 new, high-volume hopper cars. By mid-2019, about 500 of those cars had been delivered.
The rest were expected to come on line by August of 2020.
In June 2018, Canadian Pacific Railway announced plans to buy 5,900 new high-capacity hopper cars before mid-2022.
As of December 2019, CP had more than 2,300 of the new hoppers in service, with an additional 1,000 cars expected to come on line by the end of 2020.
As of Dec. 31, 2019, grain hoppers owned by the federal government accounted for about 27 percent of the total fleet used by CN and CP.
The remaining 73 percent is owned by shippers, railway companies or other entities.
The total salvage value of 556 damaged, destroyed or retired cars in 2019 was $6.4 million, an average value of $11,526 per car.
No bulk retirements took place in 2019 but approximately 40 percent of the remaining federal fleet — nearly 2,900 cars — will reach the end of their 50-year service life between 2026 and 2027.
By 2028, about 4,300 federal cars will remain in service, but the vast majority of those will be retired by 2036.
According to federal government estimates, all hopper cars in the federal fleet will be removed from service by 2044 and the fleet will no longer exist.