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An update from Murray Hamilton

August 2018

As we begin the new crop year, I think it's worth reflecting on the year we're finishing. Last September was our biggest-ever month for moving Canadian grain. Overall, we moved 1 percent more Canadian grain in 2017-18 than we did a year earlier, despite a challenging winter that affected the entire supply chain. On balance, the year was a success, achieved by working closely with you, our customers.

Looking ahead, we are almost at the most exciting point of the year for the grain supply chain: harvest. Leading up to this crucial point, we have spent countless hours internally assessing demand forecasts and developing our operating plan to ensure a successful fall shipping season. We have also met with our external partners from all points across the supply chain to better understand their plans and collaborate to move the crop safely and efficiently to market.

The 2018-19 crop-year promises to be another excellent year. It's still early, but considering what appears to be substantial carryout from last year, we are preparing for strong grain movement throughout the crop year. As always, we expect high demand in the fall season as crops are harvested. We are geared up for weekly fall programs of 5,500 unloads and 4,000 unloads during the winter season, with the annual Port of Thunder Bay closure. By the end of the summer we will have added more than 100 remanufactured locomotives to the CP fleet and hired more than 700 employees in various stages of the training process to safely operate them. It is important to note that our operating plan is sized to the available supply chain capacity, which includes in-country elevator capacity, port terminal capacity, and other facilities like canola crush and container stuffing operations.

For the upcoming crop year, CP is excited and ready to handle the strong demand levels as they materialize. You can read more about our detailed plan to move this year's crop in our July 31 letter to Minister Garneau.

With the additional locomotive power in the system we are well positioned to deliver for our customers this year and beyond.

Speaking of the future, it starts with the expansion from unit trains of 112 grain hopper cars of varying capacities to 8,500-foot-long unit trains consisting entirely of the  modern high-capacity hopper cars, which  are capable of carrying 10% more tonnes per car. Built here in Canada, these new hopper cars have a three-pocket design (versus four-pockets in older Government of Canada hopper cars) that is faster to load and unload than older models. An 8,500-foot train with the new hoppers will be able to fit up to 147 cars, making for a total train carrying capacity which is up to 44 percent higher than today's trains.

When I talk efficiency, I sometimes hear the question from shippers: What's in it for me? Well, there's a lot in it for shippers! Each train CP delivers to your elevator will carry away substantially more grain. You'll be able to load these trains at a faster rate. CP extends the option to leave locomotives at the elevator during loading so they're on site and ready to go when the train is loaded, what we call 'power on'. The three-pocket design of the new hopper cars will also improve efficiency on the terminal side, to the benefit of our port partners, shippers and the broader supply chain.

Altogether, you have a model for world-class efficiency in moving your commodities. It's an evolutionary step forward akin to the move from grain boxcars to hoppers, and the first unit-train-loading elevators, in decades past. My team is already talking with many of you about what it will take to handle 8,500-foot trains. If you're not already talking with us about it, I hope you'll reach out to your account manager. Power-on 8,500-foot grain trains are already running on CP's network.

In the right circumstances, the power-on system can help drive greater efficiencies within the supply chain – which benefits both CP and the shipper.

Success will depend on our ability to work together. For example, for the power-on model to work, we need our shippers to:

  • Load the empty train on arrival to the elevator
  • Provide CP with pre-notification of the train completed load time
  • Bill the loads immediately upon completion of train loading
  • Provide the elevator location for their next empty train

We'll be communicating more details directly to those of you that are interested in power-on, but I just want to emphasize the ways in which we'll have to coordinate to make this program a success. I believe we can do it together, and that faster train cycles will make this program a win-win.

I hope you share my excitement for the grain train of the future, and if you have any questions in the meantime, feel free to drop me a line at grain_questions@cpr.ca.

Regards, 

Murray Hamilton
Assistant Vice-President, Sales and Marketing, Grain

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