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2019-2020 Railway Grain Plan

Earlier this month, both of Canada’s largest railways – Canadian National and Canadian Pacific released their Grain Plan for 2019 – 2020. As per section 151.01 of the Canada Transportation Act (CTA), railway companies are required to submit a report for their respective grain plan for the upcoming crop year. The following clause was incorporated into the CTA through Bill C-49 as a transparency measure “designed to foster a competitive and efficient freight system.”

151.01 (1) Before the beginning of every crop year, a prescribed railway company shall provide to the Minister a report, in the form and manner that may be specified by the Minister, that

          (a) assesses the prescribed railway company’s ability to move the grain that it is required to move during the crop year                taking into account the total volume of grain expected to be moved for the crop year; and

          (b) identifies the steps that the prescribed railway company is taking to enable it to move the grain that it is required to                move during the crop year.

Canadian National Railway’s plan can be found here. In it is a summary of the 2018-2019 which outlines the weather-related issues the railway faced throughout the year. Despite the challenges, CN reported moving over 27.5 MMT of grain products, and all-time record for the company. Looking forward, CN relies heavily on the “government estimates to determine crop size along with forecasted demand from our customers.” CN expects 2019-2020 numbers to be similar to the previous 3-year average. This estimate would put their share of grain products between 25 to 27 mmt. By purchasing 1,000 new grain hoppers, increasing network capacity, delivery of new locomotives, and a $3.9 billion investment in rail infrastructure, the railway is hopeful to meet the commitment to the expected grain needs of 2020.

Similarly, Canadian Pacific Railway’s report (which can be found here) reflects on the record setting 2018-2019 year. Within that year, CP moved approximately 25 mmt of grain products despite facing challenging weather and complex international trade relations. In addition to looking at government estimates for the upcoming crop year, forecasting customer inputs along with analyzing historical averages were all integral in determining the next stages of planning. CP hopes to reach their forecasted 31.2 mmt for the 2019-2020 year by continuing to grow their operating crews, adding 170 modernized locomotives, increasing total number of hopper cars and through multiple capital enhancement projects.

In planning for the upcoming year, the railways will look to address several concerns including the stresses put on the rail system during the grain harvest season, closure of the Great Lakes – St. Lawrence Seaway and the severity of winter weather in some target areas. In addition, the non-availability of inclement weather loading systems adds additional stresses on the rail network of both Canadian Pacific and Canadian National. At this point, it is unclear when the situation will be resolved, however, without the ability to load through the rain the turn around time for these cars is delayed which has further consequences on the rest of the system.