Canadian Pacific and CN shattered records for hauling Canadian grain and grain products in the 2020-2021 crop year, which ran from Aug. 1, 2020, to July 31, 2021.

More efficient network boosted volumes: CP

CP (NYSE: CP) hauled 30.62 million metric tons (MMT), the most in its 140-year history, the railroad said Tuesday. That was 3.7% higher than the previous record of 29.52 MMT in 2019-2020.

The railway says 2020-2021 was the fourth consecutive year that CP broke its annual movement record.

Including grain moved in containers bumps up the 2020-2021 total to 31.21 MMT, a 3.4% increase from the previous crop year.

CP attributed the volume increase to investments by CP and its customers aimed at moving more grain. CP has been using an 8,500-foot high-efficiency-product (HEP) train model that can carry in excess of 40% more grain than the 7,000-foot train model because of its deployment of new high-efficiency hopper cars. Meanwhile, customers have been investing in their grain elevators to accommodate the grain trains, with 24 grain elevators able to load 8,500-foot HEP trains. 

From the fall peak season to winter and into spring, grain movements were 14% to 15% higher than the previous year. In April, demand began to fall because of market conditions and a tight supply of grain, CP said. From May to July, shipper demand was almost 15% lower than the same period year-over-year.

“CP’s team of exceptional railroaders, dedicated to providing our customers with service excellence, and the strong execution by our customers and terminal operators, has enabled the supply chain to move more grain than ever before,” said Joan Hardy, CP vice president of sales and marketing for grain and fertilizers. “The challenge created by the COVID-19 pandemic over the past 17 months has underpinned the value of strong communication and supply chain collaboration. Despite a sharp reduction in demand this spring, CP and our customers have again broken our movement record, and we celebrate that achievement across the supply chain.” 

The railway is continuing plans to purchase high-capacity grain hopper cars, promising in 2018 to purchase 5,900 of these cars. CP currently has more than 4,600 owned and leased high-capacity cars in active service, with 1,600 more expected by the end of 2021. These new cars can carry 10% more grain by weight and 15% more by volume than the older cars. 

CP’s report to Transport Canada on its 2021-2022 outlook for grain volumes is available here. Transport Canada mandates that CP and CN submit grain outlooks annually.

Investments in western Canada grain network worth billions: CN

CN (NYSE: CNI) hauled over 31 MMT of Canadian grain and processed grain products via carload in the 2020-2021 crop year, an annual record and also an increase from the previous record of 29.4 MMT set in 2019-2020.

CN also moved over 1.1 MMT of grain from western Canada via containers in 2020-2021, and it hauled grain from eastern Canada as well, the railway said. 

The railway announced in May that it plans to acquire 1,000 new high-capacity grain hoppers as part of a larger 3,500-hopper car fleet renewal program over the next three years. CN in 2018 committed to grow its fleet of these hopper cars to 6,000. 

CN has also invested CA$15 billion (nearly $12 billion) in capital and infrastructure in recent years to serve its Western grain network, according to the company.  

“As an essential transportation service to the economy, to our customers, supply chain partners, and the communities we serve, we remain committed to making capacity-enhancing investments to our network and to upgrade our rolling stock,” President and CEO JJ Ruest said. “These investments benefit our grain customers, as well as all those from the other sectors we serve.”

He continued, “CN’s grain movement has been resilient during the pandemic, achieving 14 straight months of Canadian grain volume shipment records. We recognize that growing conditions across much of the prairies have been very challenging as many producers face extremely hot and dry weather this year. Our dedicated team of railroaders will continue to work tirelessly with Canadian farmers, agri-organizations and grain customers to have the resources in place to move the upcoming harvest for the communities we proudly serve.”

CN’s grain volume outlook for the 2021-2022 crop year is available here.

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