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Week 35 Grain Transportation Report... CN performing better than CP

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    Week 35 Grain Transportation Report... CN performing better than CP

    For the first time in many weeks... CP hauled more grain cars south than CN!!! Not surprisingly... traffic to Vancouver ports suffer...

    Summary
    CN and CP supplied 4,066 (55%) of the 7,406 hopper cars ordered for delivery in Grain Week 35. They supplied a further 3,448 cars that fulfilled customer orders from previous weeks. When railway car orders are not supplied to shippers in the week they are ordered, some shipper grain sales will be lost and some will be deferred. Lost sales cannot be recovered as international buyers will obtain this grain from suppliers outside Canada. Deferred sales may be filled by the grain company in later weeks using cars supplied later on in the year by the railway however they can result in extra costs to the supply chain through higher inventory carrying costs, payment of contract penalties by shippers, payment of ocean demurrage for waiting vessels and loss of goodwill with overseas customers.
    The accumulation of each week’s unfulfilled demand for hopper cars has risen above 24,000 cars for the current grain year and represents the total volume of missed and deferred shipper orders. The net unfulfilled demand – those orders that shippers continue to expect the railways to supply excluding orders associated with rejected cars, denied orders and railway cancellations – is now 9,425 orders.

    Railway Car Supply – Grain Week 35
     CN spotted 4,004 hopper cars and CP spotted 3,510 hopper cars in the country in Grain Week 35 for a total supply of 7,514 cars – this included 3,488 cars that had been ordered for prior weeks. Grain Week 35 car spotting performance for CN was 9% higher than its YTD weekly average of 3,670 cars whereas CP was in line with its weekly average of 3,542 cars per week.

    o In Grain Week 35 CN and CP supplied 4,066 (55%) of the 7,406 hopper cars ordered for delivery in Grain Week 35 representing a shortfall of 3,340 cars for Grain Week 35 orders.
    o Timeliness of supply in response to customer orders has been consistently poor throughout the course of the crop year for both railways. To date, the railways have supplied 45% of customer orders in the week for which cars were ordered with CN (57%) performing nearly twice as well as CP (32%).
    o Grain Week 35 saw CN (56%) and CP (54%) continue their recently improved performance for spotting of empty cars in the week for which they were ordered. In CP’s case this represents the highest level of on time order fulfillment achieved for the entire grain year.
    ï‚· Through the first 35 weeks of the current crop year, railways have failed to supply 24,027 hopper cars ordered by shippers. This represents a shortfall equivalent to 9% of shipper demand.
    o more than 3,400 customer orders – approximately 36% of unfulfilled orders - have been outstanding for 4 weeks or longer 1
    ï‚· Boxcar shippers received 82% of cars ordered for Grain Week 35. This reflect two consecutive weeks of improved performance and is significantly above the overall level of fulfillment achieved year to date (67%).

    Corridor Performance
    ï‚· In Grain Week 35 traffic destined to bulk terminals in Western Canada received a slightly higher percentage (55%) of cars than other corridors. By comparison, non-bulk corridors including the USA/Mexico, Vancouver transload and Canadian domestic corridors received 52% of cars ordered for delivery in Grain Week 35.
    ï‚· Reversing a consistent pattern throughout the course of the grain year CP (52%) supplied a higher percentage of orders for non-bulk corridors than did CN (50%).
    1 Based on net unfulfilled demand – excluding rejections, cancellations and denied orders – of 9,425
    
    Railway Dwell Times at Country Origins:
     In Grain Week 35, CN’s loaded dwell times for multicar block traffic at country origin locations averaged 35 hours while CP’s loaded dwell times averaged 78 hours. CN’s performance in Grain Week 35 is below its YTD average of 41 hours; CP performance in Grain Week 35 continued a trend of worsening performance observed over the last four weeks. Week 35 performance for CP is higher than weekly average of 64 hours for the current crop year.
    o In the crop year to date, 35% of all bulk grain shipments have waited for more than 48 hours at origin for pick up by the railways after being released by shippers for movement to destination. 30% of shipments were picked up within 24 hours.

    Railway Dwell Times at Destination Terminals – Grain Week 35:
    ï‚· CN: Thunder Bay (76 hours), Vancouver bulk (27 hours) and Vancouver transload/local (44 hours)
    ï‚· CP : Thunder Bay (91 hours), Vancouver bulk (32 hours) and Vancouver transload/local (109 hours)
    ï‚· Thunder Bay dwell times continue to reflect limited traffic volumes for both CN and CP
    Port Terminal Out of Car Time – Grain Week 35
    ï‚· Port terminal out of car time for Grain Week 35 was:
    o Vancouver north shore (16%); weekly average YTD (23%) o Vancouver south shore (21%); weekly average YTD (24%) o Prince Rupert (15%); weekly average YTD (11%)

    A reasonable person looking at this weekly report... would likely conclude that CPrail is short of equipment... while reporting higher than expected profits. A consistant capacity shortfall v needed service...this 2014-15 crop year.

    #2
    From Financial Post:

    Jeff McIntosh/The Canadian Press

    Canadian Pacific Railway says its revenue for the first three months of 2015 was up 10 per cent from last year, hitting $1.67 billion.

    Canadian Pacific Railway Ltd. notched another series of financial records in the typically difficult winter quarter, including the lowest operating ratio in the company’s history.

    CP’s operating ratio — a key measure of efficiency, in which a lower number is better — fell 880 basis points to 63.2 per cent. By comparison, competitor Canadian National Railway Co. reported an operating ratio of 65.7 per cent in the first quarter.

    CP also reported record first-quarter profit of $320 million, up 33 per cent. Adjusted earnings per share came in at $2.26, well ahead of the $2.17 expected by analysts. Revenue rose 10 per cent to $1.67 billion, another first-quarter record.

    Related
    CN cuts crude-by-rail forecast but still expects strong profit growth
    Canadian railways poised to outperform as U.S. rival Norfolk Southern issues profit warning
    Advertisement

    “CP’s success in the first quarter of the year is the result of hard work by its people and a business model that responds nimbly to any shift in economic conditions,” CEO Hunter Harrison said in a statement Tuesday.

    “Amid persistent uncertainty in the pace of the North American economic recovery, CP continues to demonstrate the ability to recognize and capitalize on new business opportunities and operational efficiencies.”

    CP said freight revenues for nearly all of the commodities it ships increased in the first quarter, with the exception of crude, automotive, and metals, minerals and consumer products.

    http://business.financialpost.com/news/transportation/canadian-pacific-railway-ltd-revenue-rises-10-as-profit-hits-new-quarterly-high

    Comment


      #3
      From Financial Post:

      Jeff McIntosh/The Canadian Press

      Canadian Pacific Railway says its revenue for the first three months of 2015 was up 10 per cent from last year, hitting $1.67 billion.

      Canadian Pacific Railway Ltd. notched another series of financial records in the typically difficult winter quarter, including the lowest operating ratio in the company’s history.

      CP’s operating ratio — a key measure of efficiency, in which a lower number is better — fell 880 basis points to 63.2 per cent. By comparison, competitor Canadian National Railway Co. reported an operating ratio of 65.7 per cent in the first quarter.

      CP also reported record first-quarter profit of $320 million, up 33 per cent. Adjusted earnings per share came in at $2.26, well ahead of the $2.17 expected by analysts. Revenue rose 10 per cent to $1.67 billion, another first-quarter record.

      Related
      CN cuts crude-by-rail forecast but still expects strong profit growth
      Canadian railways poised to outperform as U.S. rival Norfolk Southern issues profit warning
      Advertisement

      “CP’s success in the first quarter of the year is the result of hard work by its people and a business model that responds nimbly to any shift in economic conditions,” CEO Hunter Harrison said in a statement Tuesday.

      “Amid persistent uncertainty in the pace of the North American economic recovery, CP continues to demonstrate the ability to recognize and capitalize on new business opportunities and operational efficiencies.”

      CP said freight revenues for nearly all of the commodities it ships increased in the first quarter, with the exception of crude, automotive, and metals, minerals and consumer products.

      http://business.financialpost.com/news/transportation/canadian-pacific-railway-ltd-revenue-rises-10-as-profit-hits-new-quarterly-high

      Comment


        #4
        It is nice to see the railway making money, it certainly supports increasing spending on infrastructure to support higher volumes which we need. As I say many times: buy shares. Go to the annual meetings, listen get involved become an interested shareholder.

        Comment

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