CN says increase in crude by rail is perception, not reality

We’re several weeks into harvest, and six weeks into the crop year, which begs the question— how is rail movement out of your area? Many farmers are already reporting slow shipments and long wait times at elevators, and watching trains moving oil tankers and not grain cars has some farmers seeing red.

RealAgriculture founder Shaun Haney spoke with David Przednowek, director of marketing grain for CN Rail, to talk about where things are at with grain movement as harvest begins in Western Canada. Shaun asked him right off the bat about the oil cars that seem to be everywhere as we move into fall.

Przednowek says perception might not be reality. “Crude by rail represents about one to two per cent of CN’s total business across its network. By comparison, our grain and fertilizer segment of our business represents about 17 per cent.”

He also says that the crude moving by rail is not pushing out other commodities. “Crude by rail volume is coming on as capacity allows it to come on and it’s not at the expense of other commodities,” he says.

Przednowek says they are growing their business in all sectors. “For 2017 we started with a three to four per cent carload growth forecast ..three to four percent turned into about 13 per cent by the end of the year, and within Western Canada itself growth was about 20 percent.”

As far as the actual movement this fall Przednowek, says movement from Manitoba and Saskatchewan has been ahead of average and slower than average Alberta. There’s lot’s of elevator space in Western Canada and the orders for cars has been dropping as harvest stalls because of inclement weather.

To put into prospective what the industry has been doing Przednowek points out that since 2005 the crop has increased by 20 million tonnes, and that CN is making investments to stay ahead of the demand created by shippers. “As more demand for movement comes on for, not only grain, or intermodal or coal or just about every commodity you can name that moves on the network, we’re spending a lot of money investing heavily. It will probably be 25 per cent of our revenues for 2018 will go back into the railroads.” (listen to the full conversation below)

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