Railway Performance – Grain And all commodities
LOCATION: NATIONAL
Issue/Source: FALL IS AN important SEASON FOR CANADA’S GRAIN INDUSTRY. IT MARKS THE BEGINNING OF THE NEW CROP YEAR, SEES AN INCREASED DEMAND FOR SHIPMENTS OF GRAIN BY RAIL, ALLOWS FOR A REVIEW OF THE PREVIOUS CROP YEAR’S PERFORMANCE, AND A LOOK-AHEAD TO THE NEXT YEAR THROUGH THE RECEIPT OF CP’S AND CN’S WINTER CONTINGENCY PLANS. this fall is particularly of note, as many sectors are showing recovery following significant downturns over the past Winter and summer due to the covid19 pandemic. Fall has also historically seen increased intermodal shipments of consumer goods in advance of the christmas shopping season.
Date: OCTOBER 23, 2020.
Suggested ResponseS
- Despite many challenges, railways have continued to move large volumes of freight – including record amounts of grain this crop year. In fact, the 2019-20 crop year saw some 58.6 million metric tonnes of Western Canadian grain being shipped by rail, 7.8% more than the previous crop year. The 2020-21 crop year expects to be equally as strong, with similar volumes anticipated.
- Since the beginning of autumn, there has been a noted and encouraging increase in demand for rail service across multiple sectors, including potash, coal, forest products, and intermodal. Demand for shipments of grain is expected to remain strong throughout the winter and into spring.
- Innovations, investments and cooperation by industry and Government have facilitated growth in the transportation sector. For example, CN and CP will invest in approximately 4,400 new high-capacity grain hopper cars, which can increase the efficiency of the grain handling and transportation system. Such investments were encouraged through changes in the recent Transportation Modernization Act.
- Through the National Trade Corridors Fund, the Government of Canada has contributed more than $1.7 billion – to leverage total investments of more than $3.8 billion from a variety of partners. This will support greater fluidity throughout the national supply chain network as a whole, as well as economic growth and job creation.
- The Government continues to impress upon all supply chain partners that Canada’s transportation network must operate efficiently and reliably to meet the needs of its users, and to support Canada’s economic recovery.
BACKGROUND INFORMATION
- 2019-20 has been one of the most challenging years in recent memory for Canada’s shippers and carriers alike. Strikes, derailments, and the Coronavirus presented tremendous challenges to maintaining an efficient supply chain network.
- After sluggish demand for freight rail services throughout the spring and summer months, autumn demand has been increasing across most sectors including potash, forest products, coal, intermodal, and grain. Demand for oil shipments remains soft.
- While large volumes of freight continue to be moved by both CP and CN, many shippers continue to report issues with the service they are receiving, particularly from CN. Both railways have returned crews to work after being laid off over the summer, and cars and locomotives continue to be brought back into service.
- While these actions have increased their respective capacities to move goods, challenges remain. Increased car cycle times have been noted by shippers, and notably by grain shippers. Cycle times for grain cars headed to Eastern Canada increased 9.5% from August to September, with 24 days being the average. Conversely, cycle times to western ports have deceased by 3.6% over the same period, from an average of 16.4 days to 14.4 days.
- The volume of Western Canadian grain moved by rail during the 2019-20 crop year was an all-time high for the country. The 2020-21 crop year promises yet another strong showing, on par with the previous year. Demand for shipments of grain will remain high throughout the winter and into spring.
- Increased investment in railway infrastructure, as well as modernized elevators across the prairies and other stakeholder investments have also contributed to a more efficient grain handling transportation system.
- The Transportation Modernization Act also instituted a requirement for CN and CP to publish annual winter contingency reports, by October 1st, outlining how they will handle the unique challenges of Canadian winters as well as the increase in demand from shippers as Canada’s economy continues to recover. While the reports continue to improve year-over-year, shippers indicate that they are looking for even more detailed plans for meeting demand.