Canadian railways call for infrastructure spending despite large grain shipments

By Ross Marowits The Canadian Press

MONTREAL — The country’s two largest railways are calling for federal investments to boost the rail capacity of Vancouver’s North Shore,despite moving large quantities of grain last year.
Canadian National Railway (TSX:CNR) transported 21.8 million tonnes of the 2016-2017 Western Canadian grain crop, beating its record from two years earlier by two per cent.
Overall, Montreal-based CN Rail shipped seven per cent more than the three-year average as it set six monthly records between September and March, when grain prices are highest.
“We did this by further developing our supply chain ingenuity with our partners to meet demand, resulting in improvements in the use of equipment and better than ever efficiencies in size of trains,” stated bulk vice-president Doug MacDonald.
The railway introduced 200-car grain trains and expanded commercial agreements that allowed customers to secure 70 per cent of its car supply in advance.
Grain companies built nine new country elevators and another seven are slated to be added in the next 18 months.
Still, CN Rail said more rail capacity is needed in Vancouver to meet forecasts of increased export demand.
“Vancouver is a vital trade-oriented Canadian gateway and should be a top investment priority for the government’s new national transportation corridor infrastructure fund.”
During the last budget, the Liberal government announced it would invest $10.1 billion over 11 years on trade and transportation projects, including a $2-billion initiative to make the country’s trade corridors more efficient and reliable.
The submissions deadline for infrastructure spending directed at ports, waterways, airports, roads, bridges, border crossings and rail networks is Sept. 5.
“The movement of cargo through the West Coast is vital to Canada‚Äôs trade with Asia. Strategic investments in transportation infrastructure will provide the necessary capacity to ensure goods get to market,” said a spokesman for Transport Canada.
Canadian Pacific Railway (TSX:CP) said it’s also striving to enhance its grain service to maximize customer efficiency next season and supports trade infrastructure in Vancouver being a federal spending priority.
U.S. and Canadian grain is CP Rail’s largest line of business, accounting for more than 24 per cent of its $6 billion in freight revenues last fiscal year.
It said shipments of grain last year were consistent with the prior year and two per cent above its five-year average. Since the 2013-2014 crop-year, the Calgary-based railway has moved record, or near record, volumes of Canadian grain to market annually.
Spokesman Jeremy Berry said the last crop year would have been another record if it wasn’t for severe winter weather and a derailment that shut down a partner foreign railway.
CP Rail said the adoption of an enhanced train model and further investments in the coming crop year will allow railways, elevators and ports to increase through put by loading and unloading 8,500-foot trains.
The trains will carry at least 134 grain hoppers able to transport 20 per cent more grain than its old 112-car grain trains.
“At CP, moving grain is embedded in our DNA and has been for more than a century,” said chief marketing officer John Brooks.