The prairie railway system is nowhere near its hauling limit, says the president of Canadian Pacific Railway.
Even though major sections of both national railways are one-track lines that twist through daunting mountain ranges, there is still a lot of room for traffic to increase.
“I don’t see (hitting the limit) in the foreseeable future,” Fred Green said in an interview during Agricore United’s annual meeting.
Green said CPR’s recent investment of $160 million to boost capacity along its Moose Jaw to Vancouver line last year had increased carrying capacity by 12 to 15 percent, and other similar expansions could easily occur.
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“Should the opportunity arise that it is commercially warranted, I don’t think there would be any problem to convince the board of directors of our company to continue to expand the railway,” Green said.
After decades of mediocre financial performances, Canada’s two big railways have hit a sweet spot in the past few years, running more traffic down their lines and making bigger profits.
Green said CPR and Canadian National Railway have benefited from the same fortunate combination: overcapacity in the system has been reduced and import-export demand has surged.
“What you’ve got is a convergence of some very interesting things,” Green said.
“A lot of historic surplus capacity has disappeared, been eaten up either through abandonment or sale, and at the same time a very substantial expansion of demand has occurred, largely because of the demand for resources from China.”
Rail transport has also been helped by high fuel prices. Even though railways use a lot of fuel, they do it more efficiently than trucking and other forms of transportation.
“It lends itself to the mode which is least expensive, which is the railway,” Green said.
The rising tide from China has also lifted the CPR and CN boats and they have been co-operating to carry more freight. The two railways have divided traffic in the port of Vancouver, with one taking the north shore and one the south, regardless of whose train is on the tracks. As well, CN and CPR are sharing their tracks through the narrow Fraser Valley, with one railway running all the trains from the east to Vancouver and the other all the trains from Vancouver to the east.
