Canadian Railroads Shatter Previous May Grain Records

Canadian Pacific Railway Ltd CP and CN CNI beat previous records for grain volumes hauled in May despite the coronavirus pandemic.

CP hauled 2.8 million metric tonnes (MMT) of Canadian grain and grain products in May, beating a previous record set in May 2014 by more than 300,000 metric tonnes. 

Since the 2019-2020 crop year began on August 1, 2019, CP has moved 24.17 MMT as of May 31, which is 7.3% higher than the same period for the 2018-2019 crop year and 10% higher than its three-year average. CP estimates that its market share of the country's grain elevator network is 54%, as measured by share of grain moved crop year per date. 

The railway expects to spot at least 5,700 cars per week for the remaining 10 weeks of the shipping season. CP said demand to ship to grain elevators has slowed recently because of seasonal seeding activities. That said, CP said it spotted more than 6,000 cars each week for three weeks from late April to early May, which was higher than CP's forecast of 5,700 cars per week.

CP attributes the volume increase to its nearly 2,700 new high-capacity hopper cars, which can carry 15% more volume and 10% more weight compared to older cars, and to its 8,500-foot high-efficiency product train model, which can haul 40% more grain than the 7,000-foot train model. 

"The CP family has continued to deliver service excellence to our customers in this COVID-19 environment," said Mark Redd, CP executive vice president operations. "CP's operating teams in the field who serve country elevators and port terminals have risen to the challenge and created an environment of constructive tension that is pushing everyone to deliver. We are finding further efficiencies in every aspect of the business, creating quicker hopper car cycles, longer trains, lower dwell and faster train speeds."

Meanwhile, CN said earlier this week that it hauled over 2.52 MMT of western Canadian grain in May, beating its May 2014 record of 2.4 MMT. May's volumes were also over 20% ahead of CN's three-year average, the railway said.

CN also said May marks the third consecutive month that CN moved record monthly western Canada grain volumes. In March and April, CN hauled 2.62 MMT and 2.73 MMT, respectively. 

Since the start of the crop year last August, CN has moved 23.3 MMT of western Canadian grain. 

On a nationwide basis, CN hauled over 2.60 MMT in May, which is also a monthly company record and beats a May 2014 record of 2.52 MMT.

"This has not been an easy year for farmers or for the supply chain, yet by working closely with our customers, we have been able to adapt and deliver," said James Cairns, senior vice president, rail centric supply chain at CN. "This crop year has seen wet weather delay the harvest, service disruptions, and a pandemic, all of which have impacted the supply chain and yet the results continue to set records. We are proud of what we have accomplished in collaboration with our supply chain partners, farmers and stakeholders. We thank the agricultural community for their feedback and input and we want them to know that we are committed to supporting them and their needs."

According to the Association of American Railroads, year-to-date Canadian carloads of grain totaled 180,838 carloads for the week ending May 30, a 5.3% drop compared with the same period in 2019. Protesters blocking the western rail network in February in support of a First Nations' group's objections over the location of a proposed gas pipeline might have affected year-to-date grain volumes.

Canadian grain carloads over the past year. RTOGR