Winnipeg-based Richardson on Monday announced expanded rail car spots for its elevators at Lacombe, Carseland, Provost and Olds, Alta.; Estevan, Whitewood and Nokomis, Sask.; and its Dundonald elevator about 20 km north of Portage la Prairie, Man.

At Whitewood, about 110 km south of Yorkton, the expansion work will also include upgraded storage capacity, bringing it up to about 44,800 tonnes from its current 31,140. A company spokesperson said the upgrades will also boost that site’s loading speed to 134 cars in 16 hours.

The expansion work is due to start later this summer for completion by the end of next year, Richardson said.

The expansions, CPKC said, will allow future trains from these sites to run under the railway’s 8,500-foot (2.6-kilometre) High Efficiency Product (HEP) model.

CPKC’s standard unit train for grain, which today runs up to 7,000 feet (2.1 km), is the model Richardson today ships from 27 CPKC-served elevators in Canada and one in the northern U.S.

In 2018, before its merger with Kansas City Southern, CP unveiled new high-efficiency grain hopper cars for the HEP model, featuring a five per cent shorter frame capable of carrying 10 per cent greater weight and 15 per cent more volume than previous-generation hopper cars. In all, CP said at the time, the 8,500-foot HEP train model is expected to allow a train to handle about 44 percent more grain.

Richardson’s newest elevator, commissioned earlier this year at Carmichael, Sask., about 65 km southwest of Swift Current, marks the grain handler’s first 8,500-foot HEP-compatible site, with a loop track to handle up to 175 high cube-style rail cars.

Richardson president Darwin Sobkow said in a release Monday the expansions at the eight Prairie elevators “will increase capacity and efficiency, enabling Richardson to further benefit from CPKC’s single-line network reaching Canada, the U.S. and Mexico.”

CPKC executive vice-president John Brooks said in the same release Monday that “Richardson’s ability to run longer trains will mean more grain shipped per train, tighter cycles and more Richardson trains moving across our expanded, single-line network throughout the season.”

The move follows the completion in April of CPKC’s merger, which officially ties CP’s track to Kansas City’s lines in the U.S. and Mexico.

That single-line rail network will also make for a “seamless pipeline” between Richardson’s Prairie elevators in “durum-rich areas in Saskatchewan” and its U.S. durum flour milling operation, Italgrani, at St. Louis, CPKC said Monday.

“Furthermore, the combined network and markets in the southern U.S. and Mexico are opening new doors to Richardson for their grains, oilseeds and processed products.” — Glacier FarmMedia Network

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The Canadian Transportation Agency (CTA) on Thursday announced the volume-related composite price index (VRCPI) for Canadian National Railway (CN) for 2023-24 will be 1.8295, up 12.11 per cent from 2022-23.

CPKC’s (Canadian Pacific Kansas City), meanwhile, will be 1.7616, up 5.43 per cent.

The VRCPI is the major variable in the formula that decides the railways’ maximum revenue entitlements (MREs) each crop year. Set each year by the CTA, based on submissions from CN and CPKC, the VRCPI is an inflation factor based on a composite of forecast prices for railway labour, fuel, material and capital purchases.

For the 2023-24 crop year beginning Aug. 1, much of the difference between forecasted and actual cost increases that’s reflected in the increased VRCPI is “directly linked to unexpectedly high fuel and related material costs in 2022,” the CTA said in a release.

The CTA said its fuel model for 2022-23, based on third-party forecasts at the time, projected the railways’ fuel costs would rise by just over 30 per cent.

However, in 2022, those costs actually rose by over 63 per cent on “a notable shortage in the supply of diesel fuel in North America and increased global demand.”

Adjustments were also made for other cost components, including the railways’ “material component,” the CTA said. The agency already determined the cost-of-capital rates for each railway for the new VRCPI in separate rulings last Thursday (April 20).

With the VRCPIs now in place, the MREs — the upper-limit dollar figures on the revenue CN and CPKC can earn for shipping regulated grain in a given crop year — must be set by the CTA for 2023-24 by Dec. 31, 2024 at the latest.

The MRE limits the revenue CN and CPKC can earn for movement of western grain as far east as Thunder Bay or Armstrong, Ont., or up to Churchill, Man., or to ports in British Columbia.

If Prairie grain revenue in a given crop year overshoots their MREs, the two railways’ overages would then be payable to the Western Grain Research Foundation, the mandated beneficiary. — Glacier FarmMedia Network

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CP, however, is questioning the TSB’s conclusions about the braking performance of the train involved, saying those conclusions are “based on inappropriate extrapolation of data and unsupported inferences.”

The TSB on Thursday released its report into the Feb. 4, 2019 crash near Field, B.C., in which two of three locomotives and 99 cars from a 112-car train of loaded grain hopper cars derailed and crashed in steep mountain terrain, killing the three members of the train’s relief crew.

“This tragic accident demonstrates, once again, that uncontrolled movements of rolling stock continue to pose a significant safety risk to railway operations in Canada,” TSB chair Kathy Fox said Thursday in a release.

“It is obvious that more must be done to reduce the risks to railway employees and the Canadian public, reduce preventable loss of life, and increase the safety and resilience of this vital part of the Canadian supply chain.”

The TSB, in its report, calls on Transport Canada to establish “enhanced test standards and requirements for time-based maintenance” of brake cylinders on freight cars operating on steep descending grades in cold ambient temperatures.

It also calls on the transport department to require Canadian railways to “develop and implement a schedule for the installation of automatic parking brakes on freight cars,” putting a priority on retrofits for cars used in “bulk commodity unit trains in mountain grade territory.”

It also asks Transport Canada to require CP “demonstrate that its safety management system can effectively identify hazards arising from operations using all available information, including employee hazard reports and data trends; assess the associated risks; and implement mitigation measures and validate that they are effective.”

According to the TSB’s report, the train was westbound on CP’s Laggan subdivision, which runs from Calgary to Field, about 20 km west of Lake Louise. It started to descend the Field Hill just after 9:30 p.m. on Feb. 3, and while on the “steepest part of the grade,” it wasn’t able to keep its speed below at or below the 15-mph limit.

When the train reached 21 mph, the crew, following operating procedure, stopped the train using its emergency brakes at Partridge, B.C., with about nine miles of steep descending grade still to go. Brake cylinder pressure retaining valves were then set on 84 cars in the train.

With the inbound crew’s shift over, a relief crew was called in to complete the trip to Field, but that crew was delayed in arriving until about 12:20 a.m., by which time the temperature was -28 C and the train’s air brake system “had been leaking compressed air, reducing the brakes’ capacity to hold the train on the steep grade,” the TSB said.

The brake cylinders’ leakage, the TSB said, was “a situation made worse by their age and condition, and exposure to extreme cold temperatures over time” and “after being stationary on the hill for around three hours, air leakage reached a critical threshold and the brakes could no longer hold the train on the steep grade.”

Before the relief crew could start the process to get the train underway again, the train “began to creep forward, gradually accelerating uncontrolled down the steep grade.” The TSB said the relief conductor and conductor trainee left the cab at that point planning to apply hand brakes to try and stop or slow the train but were instead called back to the cab moments later by the engineer for their safety.

The train was able to make its way around back-to-back reverse curves, but eventually accelerated to 53 mph, “was not able to negotiate” a sharp curve right before the Kicking Horse River bridge, and derailed.

The TSB said it identified “a number of safety deficiencies” contributing to the crash, including the “degradation” of air brake systems in extreme cold temperatures; the “limitations” of current train brake test methodologies to account for such conditions; and the need for “additional physical defences” to prevent such uncontrolled movements.

Crew training, the TSB said, was “not specific to the unique operating conditions of the Laggan subdivision. The board also called out the “inadequacy of experience of employees supervising mountain-grade operations on this subdivision.”

The TSB also pointed to a “need for better identification of hazards through reporting, data trend analysis, and risk assessments under CP’s safety management system to support risk mitigation measures.”

‘Fully-trained’

CP, in its statement Thursday, replied that both the locomotive engineers of the inbound crew and the relief crew were “fully-trained, qualified and certified, and were well-experienced in the handling of trains on mountain grades,” and the trainmaster was also “a qualified locomotive engineer with experience on mountain grades.”

Both crews and the trainmaster “agreed on the appropriate steps to be taken in line with existing procedure,” CP said, adding that operating procedure for that specific hill was based on practices set up following “previous incidents” over two decades earlier. “This was not an issue of training and/or experience.”

CP, in Thursday’s statement, said the TSB “has erroneously concluded, based on inappropriate extrapolation of data and unsupported inferences, that the involved train exhibited poor braking performance.”

The board’s report, the company said, confirms the train “was fully functional, met all industry standards and passed all regulatory brake test inspections.”

CP further said its safety management system meets regulations and there were “no systemic hazards that were not appropriately addressed” by that system, including Field Hill train braking performance.

Given “the gravity of this incident and the tragic loss of life, it was extremely disappointing that the TSB misrepresented the facts at today’s news conference and misunderstood key facts about the incident in its report,” the company said.

CP said Thursday it would be talking to the TSB directly about those “inaccuracies and misrepresentations,” and also noted the crash is still the subject of a preliminary inquiry by RCMP. — Glacier FarmMedia Network

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“I don’t see anything drastically changing in the next week,” she said.

Harakal added there was nervousness in the western Canadian feed industry when a work stoppage at Canadian Pacific Railway began Sunday.

Prior to the work stoppage, those in the feed industry warned there was perhaps one to two weeks’ worth of corn available. With last summer’s drought having caused a sharp reduction in barley and wheat production on the Prairies, corn imports from the U.S. have been necessary. With that, CP had set up a program to supply that U.S. corn since so many of the delivery points are already on their lines.

However, the CP stoppage came to a quick end Tuesday as the company and the Teamsters Canada Rail Conference agreed to seek binding arbitration and resumed operations.

The weekly export sales report from the U.S. Department of Agriculture showed for the week ended March 17 that accumulated corn sales to Canada stood at more than 2.14 million tonnes. A year ago they were a little under 295,000 tonnes. Outstanding sales were just short of 1.4 million tonnes for this year compared to about 291,000 tonnes 12 months ago.

With the volatility in futures, largely caused by the war in Ukraine, Harakal noted local feed prices most often do not react quickly to any changes, at least not for a few days.

Feed barley prices were about $435 per tonne for April movement out of Lethbridge, she said, with wheat around $435-$440. She quoted corn at about $460/tonne.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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The company said Monday that out of 30 storm-damaged spots across its Thompson and Cascade subdivisions in southern British Columbia, 20 had seen “significant loss of infrastructure” in need of repair.

CP workers’ “dedication, grit and perseverance in the face of extremely challenging conditions are the reasons we are able to restore our vital rail network in only eight days,” CEO Keith Creel said in a release.

CP said its repair crews have moved 150,000 cubic yards of earth and rock to rebuild damaged areas and that it deployed “hundreds” of CP employees and contractors to assist.

The next 10 days will be “critical,” Creel added. “As we move from response to recovery to full service resumption, our focus will be on working with customers to get the supply chain back in sync.”

Calgary-based CP said it would “closely co-ordinate with customers and terminals to clear (freight) backlogs as quickly and efficiently as possible,” and that would require “weekend work and flexible schedules” at customer and terminal locations.

The company also said it’s “closely” co-ordinated with the provincial transportation and infrastructure ministry on projects such as reconstruction of grades for railway infrastructure and the Trans Canada Highway at Tank Hill west of Spences Bridge.

“That partnership has fostered the ability to efficiently redirect ministry equipment to other recovery sites to support highway repairs,” CP said.

CP’s Montreal-based rival Canadian National Railway (CN) hasn’t yet offered up information on when its track can again be used to access the Port of Vancouver.

CN had said Friday it expected repair work to continue “at least into next week” and that in the meantime it would be looking at ways to divert export freight to Prince Rupert, another B.C. West Coast port it serves.

Forecasters also warn the “atmospheric river” storm that unloaded precipitation over the region Nov. 14-16, leading to flooding, washouts and landslides and cutting off railways and highways alike, won’t be the last such system in the region in the near future.

Warning preparedness meteorologist Armel Castellan of Environment and Climate Change Canada, speaking Monday on Facebook, said another atmospheric river system, “tapping into subtropical moisture and heat,” is expected to arrive in the region Thursday, followed by another active storm system through the weekend into the following week.

Thursday’s system, he said, is expected to produce “non-negligible” amounts of moisture — such as 40-70 mm of rain in the Fraser Valley and “potentially upwards of 100” mm in the North Shore mountains around Howe Sound — that are “likely to exacerbate the difficulties on the ground currently.”

U.S. forecaster AccuWeather concurred Monday, predicting “another train of storms” through already-hard-hit areas of B.C. and the U.S. Pacific Northwest this week, and that warmer temperatures could also bring mountain snowmelt to those regions. — Glacier FarmMedia Network

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The decision was a blow to the deal that would create the first direct railway linking Canada, the U.S. and Mexico.

The voting trust would temporarily own Kansas City Southern without CN exerting control. It would have allowed KCS shareholders to receive and keep the $325 per share in cash and stock CN was offering, even if the combination was subsequently rejected by the regulator, the U.S. Surface Transportation Board (all figures US$ except where noted).

The STB said it left the door open for the companies to seek full review of their proposed merger. Regulatory experts said the process would be uncertain and could last more than a year. The companies did not immediately respond to requests for comment on their next steps.

KCS has an alternative suitor, Canadian Pacific Railway (CP), whose $25 billion deal to buy the company in March was later trumped later by CN.

Canadian Pacific’s proposed voting trust was approved in May, and this month the company presented a new $27 billion cash-and-stock bid for Kansas City Southern, confident the STB would reject CN’s voting trust.

CP did not immediately respond to a request for comment, but CP CEO Keith Creel said in a release that the company’s Aug. 10 offer to KCS “still stands.”

The STB’s ruling, Creel said, “clearly shows that the CN-KCS merger proposal is illusory and not achievable” and “knowing this, we believe (CP’s offer) recognizes the premium value of KCS while providing regulatory certainty (and) ought to be deemed a superior proposal.”

KCS shares closed on Tuesday down 4.39 per cent at $280.67. CN shares closed up 7.36 per cent at $148.40, indicating relief from shareholders that the acquisition now looks unlikely. CP shares dropped 4.55 per cent to C$86.69, highlighting trepidation among its shareholders over paying up for a deal with KCS.

After the STB decision, a CN shareholder, hedge fund TCI Management, sent a letter to the company’s board urging it to cancel its deal with KCS and replace CEO Jean-Jacques Ruest with Jim Vena, a veteran of both CN and Union Pacific. Vena could not be immediately reached for comment.

“The board must take responsibility for the company’s recent underperformance and failure,” TCI said in the letter. The fund, run by hedge fund veteran Chris Hohn, has a 5.2 per cent stake in CN and is also CP’s largest shareholder.

The STB said that even though the overlap of CN’s and KCS’s networks was confined to about 113 km between Baton Rouge and New Orleans, the two railways operated parallel lines in the central portion of the U.S. and could be under less pressure to compete if the voting trust was approved.

“The board finds that applicants have not demonstrated that their use of a voting trust would be consistent with the public interest,” the STB said in a statement.

U.S. President Joe Biden has issued sweeping executive orders aimed at promoting competition in the U.S. economy. One order encouraged the STB to consider Amtrak’s statutory rights when assessing whether a rail merger is in the public interest.

Passenger railroad Amtrak, majority owned by the U.S. government, had opposed CN’s voting trust, saying its pledge to divest the Baton Rouge to New Orleans line will harm future passenger service in Louisiana.

— Reporting for Reuters by Shreyasee Raj and Abhijith Ganapavaram in Bangalore and Greg Roumeliotis in New York. Includes files from Glacier FarmMedia Network staff.

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It would be the largest ever combination of North American railways by transaction value. It comes amid a recovery in supply chains that were disrupted by the COVID-19 pandemic, and follows the ratification of the U.S.-Mexico-Canada Agreement (USMCA) last year that removed the threat of trade tensions that had escalated under former U.S. President Donald Trump.

“Think about what we’ve gone through, think about the importance in North America of near-shoring that is occurring. This network uniquely provides a supply chain that allows our customers and our partners to actually benefit from that and leverage that opportunity,” CP CEO Keith Creel told Reuters in an interview.

The combination needs the approval of the U.S. Surface Transportation Board (STB). The companies expressed confidence this would happen by the middle of 2022, given that the deal would unite the smallest of the seven so-called Class I railways in the United States, which meet in Kansas City and have no overlap in their routes. The combined railway would still be smaller than the remaining five Class I railways.

The STB updated its merger regulations in 2001 to introduce a requirement that Class I railways have to show a deal is in the public interest. Yet it provided an exemption to Kansas City Southern given its small size, potentially limiting the scrutiny to which its acquisition will be subjected.

“I don’t see it as the kind of consolidation that should raise concerns because it’s what you call an end-to-end or vertical merger. Their networks fit nicely with each other and help fill out North America with real service,” said economist Clifford Winston, a senior fellow at the Brookings Institution who specializes in the transportation sector.

An STB spokesman said the regulator had not yet received a filing from the companies, which would start its formal review process. He declined to comment further.

Still, CP agreed in its negotiations with Kansas City Southern to bear most of the risk of the deal not going through. It will buy Kansas City Southern shares and place them in an independent voting trust, insulating the acquisition target from its control until the STB clears the deal.

Were the STB to reject the combination, CP would have to sell the shares of Kansas City Southern, and one source close to the agreement suggested they could be divested to private equity firms or be relisted in the stock market. Kansas City Southern shareholders would keep their proceeds.

There is a $1 billion reverse breakup fee that CP would have to pay Kansas City Southern if it cannot complete the formation of the trust, the source added (all figures US$).

Shareholders of Kansas City Southern will receive 0.489 of a Canadian Pacific share and $90 in cash for each Kansas City Southern common share held, valuing Kansas City Southern at $275 per share, a 23 per cent premium to Friday’s closing price, the companies said in a joint statement. Including debt, the deal is valued at $29 billion.

Kansas City Southern shareholders are expected to own 25 per cent of Canadian Pacific’s outstanding common shares, the companies said. Canadian Pacific said it will issue 44.5 million shares and raise about $8.6 billion in debt to fund the transaction.

It is the top M+A deal announced thus far in 2021. While it is the biggest ever involving two rail companies, it ranks behind Berkshire Hathaway’s purchase of BNSF in 2010 for $26.4 billion.

Creel will continue to serve as CEO of the combined company, which will be headquartered in Calgary under the name Canadian Pacific Kansas City (CPKC), the companies said in a statement.

Kansas City would be designated as the combined company’s U.S. headquarters, while its Mexico headquarters would remain in Mexico City and Monterrey. CP’s current U.S. headquarters, in Minneapolis, would still remain “an important base of operations,” CP said.

The companies also highlighted the environmental benefits of the deal, saying the new single-line routes that would be created by the combination will help shift trucks off crowded U.S. highways and cut emissions.

Rail is four times more fuel efficient than trucking, and one train can keep more than 300 trucks off public roads and produce 75 per cent less greenhouse gas emissions, the companies said in the statement.

For Chicago alone, CP said, the combination would allow some traffic between KCS-served points and the upper U.S. Midwest and Western Canada to bypass that rail hub city by way of the CP route through Iowa, potentially reducing rail congestion and fuel burn.

Failed bids

Calgary-based CP is Canada’s No. 2 railroad operator, behind Canadian National Railway (CN), with a market value of $50.6 billion.

It owns and operates a transcontinental freight railway in Canada and the U.S. Grain haulage is the company’s biggest revenue driver, accounting for about 58 per cent of bulk revenue and about 24 per cent of total freight revenue in 2020.

Kansas City Southern has domestic and international rail operations in North America, focused on the north-south freight corridor connecting commercial and industrial markets in the central U.S. with industrial cities in Mexico.

CP’s latest attempt to expand its U.S. business comes after it abandoned a hostile $28.4 billion bid for Norfolk Southern in April 2016. CP’s merger negotiations with CSX Corp., which owns a large network across the eastern U.S., failed in 2014.

CP last year did buy the Central Maine and Quebec Railway (CMQ), which gave it additional track through Quebec and a line to the U.S. east coast through Maine, including the assets of the ill-fated Montreal Maine and Atlantic Railway.

A bid by CN to buy BNSF was blocked by U.S. antitrust authorities more than two decades ago.

A private equity consortium led by Blackstone Group and Global Infrastructure Partners (GIP) made an unsuccessful offer to acquire Kansas City Southern last year. The sources said that bid helped revive CP’s interest in Kansas City.

— Reporting for Reuters by Nandakumar D and Ann Maria Shibu in Bangalore and Rebecca Spalding and Greg Roumeliotis in New York; writing by Denny Thomas. Includes files from Glacier FarmMedia Network staff.

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The Canadian Transportation Agency (CTA) on Dec. 22 ruled Canadian National Railway (CN) and Canadian Pacific Railway (CP) each overshot their maximum revenue entitlements (MREs) for the year, by $3,170,615 and $2,170,010 respectively.

The overages, plus respective five per cent penalties of $158,531 and $108,501, are payable to the Western Grains Research Foundation (WGRF), the agreed-upon beneficiary, within 30 days of the ruling date, the agency said.

The railways’ allowable MREs for the crop year were $930,331,426 and $997,060,798 respectively.

CN’s qualifying Prairie grain movements in 2019-20 totalled 23,525,161 tonnes, while CP’s reached 24,498,737. Their average lengths of haul came in at 1,013 and 918 miles respectively, the CTA said.

Combined, their grain handle was up 4.3 per cent on the year, while their combined average length of haul, at 965 miles, was down 1.4 per cent, the agency said.

The two railways’ annual MREs, commonly described as their revenue caps, are calculated using a formula factoring in their grain handles and average length of haul along with the volume-related composite price index (VRCPI), an inflation index reflecting the railways’ costs for labour, fuel, materials and capital purchases.

The CTA in May 2019 set the 2019-20 VRCPIs at 1.4371 for CN and 1.5148 for CP, both up from 2018-19. Both railways later sought and got adjustments from the agency, which raised CN’s 2019-20 index to 1.4498 and CP’s to 1.5311.

The 2019-20 crop year marked the second in which CN and CP have separate VRCPIs, following amendments to the Canada Transportation Act in 2018.

The CTA in May 2019 said the increased VRCPIs for 2019-20 were based mainly on “modest increases in the fuel and material components” of the index, and from the “recognition of costs for the acquisition of hopper cars.”

CN and CP in 2018-19 both came in below their MREs, after both booking overages of seven figures above their MREs during each of the previous four crop years. — Glacier FarmMedia Network

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Since updates to the Canada Transportation Act in 2018, Canada’s major rail companies have been required to publish winter plans and can be forced to pay up if they fail to deliver on certain promises of railcars.

That legislation came into effect after producer frustration over railways being unable to move products to market, often because poor weather resulted in lower handling capacity.

For example, 2013-14 saw a bumper crop collide with extreme winter conditions that led to a severe gridlock on North American railroads – and a financial hit to the pocketbooks of producers.

Last year, cold weather and other weather events, combined with protestors blocking rail lines and the early days of COVID-19 was also considered challenging – but the major rail companies reported largely strong winter performances.

In its 2020-21 contingency plan, Canadian Pacific Railway (CP) boasts of its capital investments in safety and a strategy to monitor weather conditions and adapt accordingly.

It also plans to increase the number of locomotives on heavier bulk trains, generally used for moving products like coal and potash, in order to better handle any additional moisture on the track.

CP said it’s also installing “new, smarter” heater systems to keep switch points clear of snow and ice across its western corridor. “These machines are designed with added sensory devices to allow for greater situational awareness at the track level,” the report read.

It also says it is “harnessing the power of predictive analytics to improve safety performance by reducing main line mechanical failures and improving our planning for train length during periods of extremely cold temperatures.”

Overall the company says it is “well positioned” to move grain during the upcoming crop year. It plans to supply 5,850 grain hopper cars from August to mid-December and from April to July, depending on market demand.

During the winter shutdown of the Port of Thunder Bay – a major export outlet for Canadian grain – the company will supply 4,300 CP grain hopper cars each week.

It anticipates moving on average 1,050 cars of grain products each week in customer-supplied equipment through most of the upcoming crop year.

“We expect to move 31.4 million metric tonnes (MMT) of grain and grain products during the 2020–2021 crop year. This target includes all Canadian grain and grain products moved by CP,” the report said. “While it’s still early, our customers indicate that they believe the upcoming year’s Western Canada grain production will be approximately 73 MMT or higher.”

Given about one quarter of all North American freight traffic flows through Chicago, the company is also urging customers to find other routing options that avoid the terminal if possible.

“On average, it takes a train 30 hours to travel through Chicago, which is about the same time it takes the same train to travel from Chicago to the East Coast. In this constrained environment, surges in freight volumes, severe weather and other adverse events can quickly cascade into a significant disruption throughout the network,” the report says.

“That disruption can affect the movement of grain, other commodities and the broader economy as a whole.”

The company is continuing to buy up more high-capacity grain hopper cars, too. In 2018 it announced plans to spend around $500 million to do so and, according to its winter report, grain customers will see more than 3,300 new cars in active service this year.

“Within reason, CP is well positioned to accommodate unexpected surges in volumes caused by challenges experienced by other rail carriers, non-rail components in the supply chain or adverse weather,” the report says.

Canadian National Railway (CN) also highlighted capital investments made to better weather the winter months. It added 260 new locomotives and 1,000 new hopper cars. It boasts of preparing snow-clearing equipment and weather forecasting as some of the ways it is planning to mitigate brutal winter conditions.

But it points to new restrictions on rail speed as a barrier to meet customer demand.

CN CEO J.J. Ruest writes in the report that those changes – made by a ministerial order in April as a means of keeping railways safe — have created “deep concerns that the order has unintended consequences that will hamper our ability to use our network and equipment attributes this winter to the full benefit of our customers and supply chain partners.”

Transport Marc Garneau’s April ministerial order imposes speed limits on “key trains” carrying fuel and other dangerous goods, and further limits speeds for “higher-risk” key trains between mid-November and mid-March.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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Canadian National Railway (CN) reported Monday it had shipped 7.76 million tonnes of grain by rail, and Canadian Pacific Railway (CP) said Friday it had moved 7.72 million tonnes.

For CN that not only marked a Q3 record, but also the seventh-consecutive month of record grain shipments, the company said in a release, including 2.43 million tonnes in August and 2.81 million tonnes in September.

“Grain demand is enabling the return to active employment of many of our people,” CN CEO J.J. Ruest said, also noting the railway’s addition of 1,500 new “locally-built, high-capacity grain cars.”

Rival CP said in achieving its record Q3 grain movements, it transported a record amount of grain in September as well, at 2.8 million tonnes.

“The CP team showed itself ready for this fall’s harvest, supporting customers and their supply chains to get grain moving off the combine and to market,” Joan Hardy, CP’s vice-president of sales and marketing for grain and fertilizers, said in that company’s release Friday.

CP said its 3,200 additional high-capacity rail cars can haul 15 per cent more volume and 10 per cent more weight than previous models, adding that its 8,500-foot trains carry 40 per cent more grain than its previous 7,000-foot trains with the older, smaller cars.

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