CN and CPKC publish their plans for moving grain in 2023-24

Both of Canada’s major railways — Canadian National (CN) and Canadian Pacific Kansas City (CPKC) — have published their annual grain transportation plans, coinciding with the start of 2023-24 crop year on August 1.

Federal legislation that was implemented after the grain backlog that occurred ten years ago this fall requires the railways to submit plans to the federal transport minister each year.

Here are some of the key figures and takeaways from CN and CPKC’s 2023-24 grain plans:

Weekly targets

• CN says it plans to move up to 7,800 cars or 744 thousand metric tonnes of bulk grain and grain products per week outside of winter, and up to 6,250 cars or 595 thousand tonnes per week during winter. These numbers are unchanged from the 2022-23 crop year.
• CPKC says it plans to move 685 thousand metric tonnes per week when the Port of Thunder Bay is open (usually April to mid-December) and 525 thousand tonnes per week during the winter months. This represents a slight increase over CP’s weekly commitment last year of 683.9 thousand metric tonnes outside of winter and 523.8 thousand during winter. (CPKC also says it prefers to report grain movement by volume rather than carloads, as new high-capacity hopper cars coming into service mean the average CPKC hopper car as of March 2023 carries 97.6 MT compared to 93.2 MT in 2018.)

Annual capacity

Based on the weekly targets, the railways say they expect to have capacity to move the following amounts of grain and grain products in the 2023-24 crop year:

• CN – 36 million metric tonnes (same as last year.)
• CPKC – 33 million metric tonnes (up from 30 million last year.)

Potential constraints referenced by the railways:

• The West Coast port strike that started in early July and has yet to reach a complete resolution as of early August will affect grain transportation this fall, both railways say. The Canada Labour Code specifically states that port workers must continue to move bulk grain through licensed terminals during a work stoppage, but the prolonged duration of the strike means that overall supply chain recovery, affecting all commodities, will stretch into 2024, says CPKC.
• Challenges with loading grain in rainy weather in Vancouver continue to cause unpredictable delays in turnaround time for hopper cars. CN specifically cites an example in the fall of 2023 when the pace of farmer grain deliveries dropped by 30 per cent on a weekly basis due to delays in getting hopper cars emptied in the rain in Vancouver. At one point, the railway says it was holding back 20 grain trains en route to Vancouver to avoid additional congestion. “There is no reason that wet weather should impact modern grain terminal operations. Multiple solutions to this problem are in place in the U.S. Pacific Northwest, which is an area with the exact same issue,” writes CN.
• Both railways argue the federal government’s reinstatement of extended interswitching as a measure to increase competition among railways will reduce rail network capacity and efficiency. Increasing distances to 160 km from defined interswitching points “creates a different pattern of regulated service because this longer distance forces railways to dedicate resources to inefficient movements,” says CN.
• The Government of Canada’s commitment to introduce legislation by the end of 2023 prohibiting replacement workers would lead to even more frequent and longer labour disruptions at Canada’s railways and ports, says CPKC.
• New government regulations related to personal leave days and sick days are also expected to impact labour availability in 2023-24, writes CN.
• Low demand for Canadian grain movement at specific times and in certain corridors — CPKC says it saw more than 5.4 million metric tonnes of unused grain capacity on its rail network last crop year, with much of that occurring through the spring months. “This low demand undermines Canada’s ability to maximize the export of grain to global markets,” writes CPKC. CN emphasizes that grain companies did not take advantage of under-utilized capacity via the Port of Thunder Bay and Great Lakes–St. Lawrence Seaway system in 2022-23.
• Winter weather — both railways’ plans contain the usual caveats around winter weather, as train speeds, lengths, and weights must be reduced when temperatures drop below minus-25 C.

Rolling stock capacity

• CPKC says it has completed its $500 million-plus investment in 5,900 new higher-capacity grain hopper cars built in Hamilton, Ontario. The merger with KCS has also introduced 4,537 high-capacity hopper cars to the CPKC fleet, bringing CPKC’s hopper car total to approximately 18 thousand, the railway says.
• CPKC says 39 elevators in Canada are now capable of loading the railway’s preferred 147-car or 8,500-foot High Efficiency Product trains, and its offering incentives to grain companies to add more to the list. CPKC says these elevators account for approximately 40 per cent of its elevator network and ship approximately 55 per cent of CPKC customer grain.
• CN says it will take delivery of 750 new high?efficiency grain hopper cars in 2024, bringing the total of new cars to 3,500 since 2018. It expects to have an owned/operated/leased fleet of approximately 11,800 hopper cars this fall, with a total fleet of around 13,500 cars when counting customer-supplied cars. (CN also says it’s reassessing whether to continue with its fleet renewal program due to the government implementing extended interswitching requirements.)

For much more, you can read CN’s 48-page plan here and CPKC’s 36-page plan here.