More grain cars now would be ‘wrong thing,’ CP CEO says

Canadian Pacific Railway’s CEO has warned readers of Canada’s two national newspapers that adding more rail cars and locomotives now on CP track would serve only to worsen the grain backlog on the Prairies.

Writing in full-page CP advertisements in Thursday’s Globe and Mail and National Post, Hunter Harrison said adding more cars to a system already congested and bogged down in cold weather “is exactly the wrong thing to do. It is like adding more cars to a highway at rush hour — everything moves that much slower.”

Furthermore, he said, “all of us in the grain supply-chain must be accountable for our respective pieces on a 24/7 basis.”

CP, he said, “can’t move trains out of the Prairies if rail cars haven’t been loaded and we can’t return empty cars back to the prairies if trains are sitting idle waiting for port terminals to unload them.”

Harrison’s public rebuttal of the railway’s critics comes as federal Agriculture Minister Gerry Ritz and Transport Minister Lisa Raitt prepare to drop into Winnipeg on Friday morning (March 7) and weigh in further on the grain backlog.

The federal ministers, the government said, are scheduled to make an “important announcement to address challenges in Canada’s grain transportation.”

While Harrison wrote Thursday he’d be “first to admit” CP’s usual service levels aren’t being met recently, he ripped recent “confusing and contradictory information in the news” about CP and Canadian National Railway (CN) and their “reported inability to move Canadian grain to ports” following last fall’s record harvest.

Moving consumer goods and commodities such as grain has been “severely impacted by harsh winter temperatures not seen in more than 60 years,” he wrote.

“We know ‘winter happens every year,’ which leads us to conduct extensive winter preparations,” he wrote, but “despite these preparations, sustained cold below -25 C is a tipping point for railways, as it is for other modes of transportation.”

And Canada’s central Prairies over the past three months have seen 49 days below that temperature, compared to 25 on average, he wrote.

“When the weather is this cold, we must take steps such as reducing train lengths to continue to move freight and ensure the safety of our employees and the communities in which we operate.”

Despite the cold, he added, “the women and men of CP remain on the job 24/7, exposed to this weather as they keep the railway operating even while, in some cases, grain elevators have temporarily suspended loading operations.”

Separate from weather conditions, he also noted Prairie farmers’ “extraordinary” 2013 crop of 80 million tonnes of grain, 37 per cent above the five-year average. “This increase was not forecasted by anyone, including grain growers themselves.”

Once the cold snap lifts, he wrote, “the grain supply chain will return to very high levels of performance over the coming weeks” but “we need all the parties to step up and provide commitments and exert additional effort.”

For its part, he added, CP expects to move 240,000 carloads of Canadian grain this crop year, up 20 per cent over the previous year’s record.

“Reliable execution”

CN, meanwhile, recently offered grain shippers a “fleet integration program” for those who wish to enter agreements to supply privately-owned, covered hopper cars for “integration into CN’s Western Canadian common fleet.”

Bids for that program opened Feb. 24 and are to close Friday at 3 p.m. MT.

CN on Feb. 24 said participants in the program would benefit from “year-round supply from CN’s common Western fleet for shipping to commercial destinations” in both Canada and the U.S., as well as “priority in weekly car order confirmation and train service planning processes.”

The program would also give shippers the benefit of having CN manage their private cars within CN’s common fleet, the railway said.

CN said its program was meant to continue to add bigger cars into CN’s Western hopper fleet, to “maximize supply chain throughput” and to “facilitate reliable execution” under the railway’s weekly scheduled grain service plan. — AGCanada.com Network

 

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