Canadian Pacific hits another grain record

A photograph of a train traveling through a snowy field.

Canadian Pacific (NYSE: CP) moved 2.09 million metric tonnes (mt) of Canadian grain and grain products in January, a company record for the month.

January’s volumes beat the previous January 2019 record by 200,000 mt, CP said late Wednesday.

“This record-setting performance was achieved through close collaboration across the supply chain and the efforts of our world-class operating team,” said Joan Hardy, CP’s vice president of sales and marketing for grain and fertilizers.

Both CP and its competitor Canadian National (NYSE: CNI) have been able to ramp up grain volumes in recent years because of capital investments to their western grain networks. Incentives laid out in the Transportation Modernization Act of 2018 encouraged the railways to invest in increasing grain-handling capacity.

The factors that contributed to CP’s record grain volumes in January include CP’s 8,500-foot high efficiency product (HEP) train model, a dedicated train program (DTP) and new high efficiency hopper cars. The HEP train model and its train length allow for more than 40% additional capacity, while the new hopper cars carry 10% more volume and 15% more weight than the older cars, according to CP. The DTP incentivizes customers to load and unload more quickly, CP said.

Although grain volumes reached a monthly record at CP, overall grain carloads were down in January, according to the Association of American Railroads. Year-to-date grain carloads in Canada for the week ending Feb. 1 totaled 35,717, a 10.2% drop from the same period in 2019.

Meanwhile, data in SONAR shows a cyclical dip in grain carloads during the winter months.

Source: SONAR Surf (RTOGR.CAN)