CP Update.

[buzz]

I saw this on the CP website - Report


http://www.cpr.ca/en/our-markets/grain/grain-update http://www.cpr.ca/en/our-markets/grain/grain-update


An update from Murray Hamilton
March 2018
As you know, the grain supply chain is currently experiencing challenges. While extreme weather has taken its toll on the entire supply chain, the challenges at CP are different than the challenges at our competitor, and I wanted to personally take the time to explain not only the challenges we are facing, but the successes we have had to this point and the opportunities we see moving forward.

While we know winter is coming each and every year, and that railroading is an outdoor sport, recently we have experienced unprecedented cold (60 percent colder, 78 percent more days below -25 Celsius) and snow along with some significant outages. Additionally, CP is experiencing unprecedented and unexpected demand being driven from dual rail-served territories in the northern catchment areas of our network. In spite of significant weather challenges our shipments are up 30 percent crop-year to date in this area. We continue to deliver overall for the grain supply chain with our year-to-date shipments, through Week 30, up 3 percent, or approximately 470,000 metric tonnes.

At CP, we strategically plan each year for the upcoming crop, which this year was originally forecast around 65 million metric tonnes, but will end up being closer to 71 million metric tonnes, close to a 10 percent difference, with much of that increased production occurring in the northern catchment area of the prairies due to dry conditions in the south. On top of the crop size, increased production in the north, weather and other challenges have created issues for the entire transportation supply chain over the last couple of weeks, these short-term challenges are episodic, not systemic and we expect our network to improve with improving weather conditions. It is also worth noting that extreme weather and line outages impact all commodity movements, not just grain.

The supply chain works best when all of the players are functioning at a high level, including both railroads. When one railroad struggles, or a shipper is dealing with a labour outage, or a vessel captain refuses to load in Vancouver due to rain – the entire supply chain suffers, just as it does when temperatures drop below -25 Celsius for long periods of time. We hope our customers, as key players within the supply chain, understand this reality.

Taken as a whole, the crop-year to date has been a successful one for CP. Our innovative Dedicated Train Program has 15 percent more subscribers this year, our cycle times were on target and generally, things along our supply chain were moving well. Our year-over-year compares would be even better if not for a very slow start to the crop-year for grain sales. A portion of CP's dedicated train capacity also sat idle for most of August and September, and some shippers struggled to fill their committed freight until November.

We continue to add both crews and locomotives to support volumes across all commodities and are confident that with the weather on our side, service and network fluidity will continue to improve. We also urge the senate and government to move forward on Bill C-49 and bring some further certainty to the supply chain moving forward.

In closing, rest assured: all hands are on deck at CP as we work to meet the needs of our customers and the North American economy. Provided all critical parties to the grain supply chain do their part, we remain confident that at the end of the crop-year, CP's performance will be strong and we hope it will be highlighted for what it is.

If you have any questions or concerns, feel free to contact me at grain_questions@cpr.ca.

Murray Hamilton
Assistant Vice-President, Sales and Marketing, Grain

[bucket]

If that doesn't make you fall off your chair laughing.....what will?


Port capacity at 50 pecent space the railways job is to get the grain to those facilities....

Isn't a boat captain refusing to load the same as a railway that won't deliver cars?

Makes a good point that he's asking for more transparency to identify whose causing the problems...

Pretty rich to mention a boat captain not wanting to load a boat when CP will let cars sit for weeks.....

[blackpowder]

Note the last. If everyone does their part we'll catch up by end of crop year.
Industry has only had 5 years to think/learn any other way.

[bucket]

5 years ....really ....elwin hermanson stood in the house of commons in 1997 outlining the exact same problems....

[blackpowder]

Wasnt making excuses. Just a jab at the board supporters.
I'm thinking we've had same politics etc. since the last spike.

[wmoebis]

If port terminals are 50% full why isn't it loaded on the boats that are waiting? Is it the RR fault that grain companies have wrong product at port?

[farmaholic]

I would think the whole thing is one big mess.....who owns which port, what grain is needed when and where. Grain grading at port....owners versus toll users. Where in the country is the grain they need actually located. Weather. Trains, CP versus CN, in and out of ports. T-Bay froze over. Prince Rupert....

So many moving parts....two RR's and how many shippers and how many ports.....shouldn't be impossible but I supposed we could expect a few hick- ups.....its when the system pukes it gets messy.

[fjlip]

So would Putin make those at fault "disappear"?

Well at least we all now know there IS NO GLOBAL WARMING!

"While we know winter is coming each and every year, and that railroading is an outdoor sport, recently we have experienced unprecedented cold (60 percent colder, 78 percent more days below -25 Celsius) and snow along with some significant outages. "

[farming101]

Also port operations often limit each ship loading to one or 2 terminals.
So when stocks get low and it is spread out between 8 locations it takes a while to fill a ship. Likely at least half of the ships berth multiple times

I wonder how they are going to supply the north shore with grain when G3 starts up. Also a possibility for a Fibreco grain loading facility. Another possible 6 million tonnes over a single rail, through a tunnel, over a bridge. Then break the trains up for unloading at some terminals. Then send the empties back on the same track. What a bottleneck. Oh and they have to raise the bridge to let ships pass through

[helmsdale]

Anyone know if CN fires grain cars onto the north shore in Vancouver via the old BCRAIL line from Prince George? Used to deliver feed to a dairy south of Prince George and honestly never seen a single grain car on that line. If they don't, then there's only one way to the coast... through the canyon.

[farming101]

Anyone know if CN fires grain cars onto the north shore in Vancouver via the old BCRAIL line from Prince George? Used to deliver feed to a dairy south of Prince George and honestly never seen a single grain car on that line. If they don't, then there's only one way to the coast... through the canyon.

I don't know but would guess they don't. I think it's about 175 miles farther.

[AlbertaFarmer5]

Our year-over-year compares would be even better if not for a very slow start to the crop-year for grain sales. A portion of CP's dedicated train capacity also sat idle for most of August and September, and some shippers struggled to fill their committed freight until November.

Why would that be? Was there no product left to ship because the carry out was overestimated, or was it because farmers wouldn't sell at the prices being offered?