The fleet of government-owned grain hopper cars will likely shrink to half its current size in the next 11 years and will be almost completely eliminated in 20 years.
That is one of the highlights contained in the 2014 Government of Canada Hopper Car Fleet Annual Report, in which Transport Canada monitors the size, condition and use of the fleet.
The report said that Ottawa’s current fleet, which consists of 8,400 cars, will soon reach the end of its useful service life. As a result, nearly 3,400 cars will be scrapped for salvage value in 2026 or 2027.
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Nearly all the cars that remain will be retired between 2032 and 2035, which means grain shippers and railway carriers will be left to buy replacements or lease cars.
“Due to the age of the original Government of Canada hopper car fleet … the next major groupings of cars to reach the end of their useful service life and be bulk retired will occur between 2026 and 2027, approximately 40 percent of the fleet, (and) between 2032 and 2035, almost all of the remaining fleet,” the report says.
“By 2044, all of the hopper cars in the Government of Canada fleet will be retired and the fleet will no longer exist.”
An operating agreement signed in 2007 requires Canadian National Railway and Canadian Pacific Railway to maintain capacity by refurbishing cars, up-grading cars to haul heavier loads, improving car cycle times and replacing some of the retired government cars with jumbo cars that have larger capacity.
All federal cars had been refurbished as of Dec. 31, 2014, meaning their useful service life had been extended to the maximum 50 years.
The Transport Canada report also shows:
- The federal government received $13 million from the railways last year for using federal hopper cars to haul commodities other than grain.
- There was a six percent decrease in the average number of federal cars that were used to move Canadian grain in regulated corridors as opposed to those that were used in the United States or on networks owned by Canadian short lines.
- The government received $4 million in revenue from 2014 salvage operations involving damaged or destroyed cars. The salvage value of a federal car was estimated at $8,000 in 2014.
The government provides its cars to CN and CP at no cost to move prairie grain to export terminals. In return, the railways manage, maintain and operate the cars on a day-to-day basis and are required to ensure sufficient car supply to meet the transportation needs of shippers.
Officials from Transport Canada declined to be interviewed.
