Monday, August 21, 2017

CP: Bring on the grain

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Canadian Pacific says it is ready to provide “best-in-class service” to grain shippers for Canada’s 2017-2018 crop year through “collaboration, communication and coordination.” The objective is “maximizing efficiency at the origin elevator and enhancing capabilities at the export terminal, all driving velocity in the rail portion of the complex grain supply chain.”

 

 

Grain by rail is heavily regulated in Canada. It was a source of contention between CP and CN and Canadian regulators two seasons ago. To improve service, CP instituted its Dedicated Train Program (DTP), “which will be more important than ever in the 2017-18 crop year, as more than 75% of CP’s grain service will use the innovative program,” CP said. “DTP provides customers with greater clarity and control of car supply to manage their supply chain. In the 2017-18 crop year, CP will look to expand DTP’s power-on component, improving cycle times and efficiency by ensuring locomotive power is available as soon as loaded grain cars are ready to be moved.”

Grain is CP’s largest line of business. For the 2016-17 crop-year, CP’s grain movements were consistent with the 2015-16 crop-year and 2% above the railroad’s five-year average. “CP is driving toward a supply chain model capable of loading, transporting, and unloading 8,500-foot-long, power-on unit trains with a minimum of 134 hopper cars of export grain,” CP noted. “Through infrastructure investment and collaboration with grain companies and port operators, this enhanced train model allows railways, elevators, and ports to increase throughput and better utilize resources. Grain elevator and port terminal infrastructure is being built and expanded to load and unload 8,500-foot trains clear of main line track.”

CP said investment in longer sidings and upgrades to its track network “enable these longer trains to move seamlessly between elevators and ports. The 8,500-foot train model [with] a minimum of 134 grain hopper cars [is] based on industry-average car lengths, [and holds] 20% more grain than 112 car grain trains. As CP and the industry move toward shorter, higher-capacity cars, CP will be able to fit more cars and more grain on each 8,500-foot train. The end result is more grain transported to market more efficiently than ever before.”

For less-than unit train customers, CP’s Open Distribution program “is segmented to better fulfill the shipping needs to these end-markets,” CP said. “Customers who do not qualify for DTP, or choose not to sign up for the program, can order cars in the Open Distribution program. Open Distribution allows shippers to input orders for four weeks, and as orders are filled, new orders can be placed.”

“At CP, moving grain is embedded in our DNA and has been for more than a century,” said CP Senior Vice President and Chief Marketing Officer John Brooks. “While we have a long history of delivering for farmers, shippers and the North American economy, we are more focused now than ever on our relationships with our customers and on building the world-class grain supply chain that will deliver for the next century. Our dedicated sales and marketing team is working with our customers to understand their needs and develop industry-leading products and total transportation solutions that maximize supply chain performance. We are entering a phase of sustainable growth where we are putting more dots on the map and adding increased optionality for our customers. That’s exciting for us, for farmers, shippers and producers.”

“CP’s Dedicated Train Program continues to add tremendous value and create efficiencies for Viterra,” said Kyle Jeworski, CEO of Viterra, a large marketer and handler of grains, oilseeds and pulses. “Working in close collaboration with the CP sales and marketing team, we continue to drive innovation, accountability and opportunity within the overall grain supply chain.”

CP has also launched an updated grain website at www.cpr.ca/grain and will continue to publish a weekly supply chain scorecard. These efforts “are all part of on-going proactive outreach highlighting CP’s commitment to accountability and transparency as it relates to the grain supply chain,” CP said.