CALGARY, Aug. 20, 2018 /PRNewswire/ - Canadian Pacific
(TSX: CP) (NYSE: CP) moved 25.8 million metric tonnes (MMT) of
western Canadian grain and grain products, soybeans and other
non-regulated principal field crops during the 2017-2018 crop year,
up 1 percent over the 2016-2017 crop-year and 1 percent above its
three-year average. September 2017
was CP's biggest-ever month for moving Canadian grain.
On balance, the past year was a success, achieved by working
closely with and listening to customers and supply-chain partners.
CP stands ready to again safely and efficiently deliver during the
2018-2019 crop year.
Ready for the new crop
In its July 31, 2018 letter to
Minister of Transport, Marc Garneau,
CP published a detailed plan to move this year's crop. CP is
closely watching crop forecasts for the railway's service area, and
is in regular communication with customers and supply chain
partners to validate forecasts for the upcoming crop size.
"Our agricultural shippers have needs that are unique within our
book of business, and we believe an ongoing dialogue with those
companies is essential to understanding and meeting their needs,"
said Joan Hardy, CP's Vice President
Sales and Marketing – Grain and Fertilizers. "Our plans for moving
this year's crop reflect that."
CP's current estimate of the western Canadian crop size, based
on Statistics Canada data, is 70.8 MMT. When adding potential
carry-in into the 2018/19 crop year production, the total crop to
move is estimated to be 83.4 MMT, 5 percent larger than the
previous five-year average. At the beginning of each crop year,
there is limited visibility on the true size of the upcoming crop,
which is truly a moving target. For example, the 2017/18 crop was
originally forecasted at approximately 65 MMT, but was actually
closer to 71 MMT – a variation of nearly 10 percent.
Based on current forecasts, CP's operating team plans to
consistently spot 5,500 hopper cars for Canadian grain weekly
through the fall, until the closure of the Port of Thunder Bay on the St. Lawrence Seaway. When
the seaway closes, CP plans to supply approximately 4,000 cars per
week. CP sizes its operating plan carefully to match supply-chain
capacity, and our plan assumes the supply chain will run at or near
capacity throughout the season.
CP continues to invest in resources to accommodate growing
demand across its network. CP currently has more than 700 employees
in training and by the end of summer will have added more than 100
remanufactured locomotives to its fleet. CP plans to spend more
than $1.55 billion in capital
investments in 2018, replacing depleted track assets and upgrading
its network.
Driving the future of grain transportation
"CP has been moving grain for over a century, and today more
than ever, we're focused on driving the future of grain
transportation for the benefit of the entire supply chain," said
Hardy.
CP is undertaking a number of innovative steps, in collaboration
with customers and stakeholders, to further improve the efficiency
and capacity of the grain supply chain. Some highlights are:
- CP announced plans to invest half a billion dollars in new
high-capacity grain hoppers to replace the aging low-capacity
Government of Canada fleet. The
new hoppers will efficiently carry up to 10 percent more grain per
car and the shorter design will allow 5 percent more cars per
train, resulting in 15 percent more grain per train. CP will add
more than 500 of these cars by the end of the calendar year, and
1,000 by the end of the first quarter of 2019 as part of its plan
to purchase 5,900 new hoppers over the next four years.
- Continued development of the 8,500-foot train model in
collaboration with customers that operate elevators and destination
terminals handling the trains. These trains will be able to haul up
to 20 percent more grain per train than the current 7,000-foot
model, and up to 44 percent more grain per train when combined with
new high-capacity hoppers.
- A power-on model, where locomotives stay at a grain elevator
while a train is loaded, will be used strategically at selected
locations.
These innovations build on CP's popular Dedicated Train Program
(DTP), which allows customers to lock-in dedicated unit trains to
serve their facilities for the entire crop year. The DTP provides
incentives for both CP and grain shippers to keep trains cycling
with minimal delay. It's an especially powerful model for
supply-chain efficiency when combined with new high-capacity cars,
8,500-foot trains, and the power-on model.
CP's Open Distribution Program is segmented to better fulfill
the shipping needs of less-than-unit-train customers to specific
end-markets. Customers who are not part of the DTP can order cars
in the Open Distribution Program. Open Distribution allows shippers
to input orders for upcoming weeks, and as orders are filled, new
orders can be placed.
"Even as we pursue supply chain innovation, we are focused on
the fundamentals of meeting farmers' needs this crop year," Hardy
said. "In collaboration with our partners across the supply chain,
CP looks forward to a successful year of transporting grain and
connecting North America's
commodities with the world."
Forward Looking Statement
This news release contains certain forward-looking information
within the meaning of applicable securities laws relating, but not
limited, to CP's plans and expectations with respect to
transporting grain and other crops in the 2018/2019 crop year, the
implementation and results of CP's sales and marketing, operations
and technology initiatives as well as the Company's operations,
priorities and plans, anticipated performance, business prospects,
programs and strategies. This forward-looking information also
includes, but is not limited to, statements concerning
expectations, beliefs, plans, goals, objectives, assumptions and
statements about possible future events, conditions, and results of
operations or performance. Forward-looking information may contain
statements with words or headings such as "financial expectations",
"key assumptions", "anticipate", "believe", "expect", "plan",
"will", "outlook", "should" or similar words suggesting future
outcomes. Undue reliance should not be placed on forward-looking
information as actual results may differ materially from the
forward-looking information. Forward-looking information is not a
guarantee of future performance. By its nature, CP's
forward-looking information involves numerous assumptions, inherent
risks and uncertainties that could cause actual results to differ
materially from the forward looking information, including but not
limited to the following factors: changes in business strategies;
general North American and global economic, credit and business
conditions; risks in agricultural production such as weather
conditions and insect populations; the availability and price of
energy commodities; the effects of competition and pricing
pressures; industry capacity; shifts in market demand; changes in
commodity prices; uncertainty surrounding timing and volumes of
commodities being shipped via CP; inflation; changes in laws and
regulations, including regulation of rates; changes in taxes and
tax rates; potential increases in maintenance and operating costs;
uncertainties of investigations, proceedings or other types of
claims and litigation; labour disputes; risks and liabilities
arising from derailments; transportation of dangerous goods; timing
of completion of capital and maintenance projects; currency and
interest rate fluctuations; effects of changes in market conditions
and discount rates on the financial position of pension plans and
investments; and various events that could disrupt operations,
including severe weather, droughts, floods, avalanches and
earthquakes as well as security threats and governmental response
to them, and technological changes. The foregoing list of factors
is not exhaustive. These and other factors are detailed from time
to time in reports filed by CP with securities regulators in
Canada and the United States. Reference should be made to
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Forward-Looking
Information" in CP's annual and interim reports on Form 10-K and
10-Q.
Readers are cautioned not to place undue reliance on
forward-looking information. Forward looking information is based
on current expectations, estimates and projections and it is
possible that predictions, forecasts, projections, and other forms
of forward-looking information will not be achieved by CP. Except
as required by law, CP undertakes no obligation to update publicly
or otherwise revise any forward-looking information, whether as a
result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific is a
transcontinental railway in Canada
and the United States with direct
links to major ports on the west and east coasts, providing North
American customers a competitive rail service with access to key
markets in every corner of the globe. CP is growing with its
customers, offering a suite of freight transportation services,
logistics solutions and supply chain expertise. Visit cpr.ca to see
the rail advantages of CP. CP-IR
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SOURCE Canadian Pacific