CP to invest C$500 million in high-capacity grain hopper cars

by Eric Schroeder
Share This:
Search for similar articles by keyword: [CP], [Canada], [Transportation], [Grain handling]

CP train
 
CALGARY, ALBERTA, CANADA — Canadian Pacific Railway Ltd. (CP) on June 7 unveiled plans to invest more than C$500 million on new high-capacity grain hopper cars. The investment is part of the company’s commitment to the North American agricultural sector, which was adversely affected by transportation problems earlier this year.

CP said it has placed an initial order to purchase 1,000 grain hopper cars from National Steel Car, with more than 500 of the cars expected to be put into service before the end of 2018.

Keith Creel CP CEO and President
Keith Creel, president and chief executive officer of CP

“For more than 100 years, grain has been embedded in CP’s DNA,” said Keith Creel, president and chief executive officer of CP. “We know farmers depend on us to transport their product efficiently, safely and reliably to market. It’s the largest sector of CP’s business by revenue, and we’re committed to continuous improvement for the benefit of our customers and the North American economy. These new railcars will revitalize our fleet and help cement our status as an industry leader in grain transportation for decades to come.”

While CP’s initial order was for 1,000 cars, the company said it plans to buy approximately 5,900 hopper cars in total over the next four years. In doing so, CP said it should be able to remove all low-capacity hoppers, including all government of Canada cars, from its fleet. The investment is made possible by changes to the Maximum Revenue Entitlement formula through the passage of the Transportation Modernization Act, Act C-49, which provided CP the certainty needed to place the order. CP will be the first Class 1 railway to receive hoppers as a result of the Act’s changes.

AAFC Minister Lawrence MacAulay
Lawrence MacAulay, Canada’s Minister of Agriculture and Agri-Food

“CP’s investment in new hopper cars will directly benefit Canada’s farmers, grain shippers and the economy as a whole,” said Lawrence MacAulay, Canada’s Minister of Agriculture and Agri-Food. “This investment results from the positive conditions recently brought in by the Transportation Modernization Act and will improve the efficiency of the freight rail network in Canada, which will help ensure farmers are able to reliably get their products to market.”

CP described the new car design as “shorter” and “lighter” than CP’s current fleet, with the ability to carry more grain. Additionally, the new cars feature a three-pocket design that can be loaded and unloaded more efficiently than the old four-pocket government cars, CP said. The new hopper cars can handle more than 15% greater volume and 10% greater load weight than the cars being retired, while featuring a shorter frame that enables more cars in a train of the same length, the company noted.

The order comes as CP is working toward an 8,500-foot-long, power-on model for its dedicated grain trains. Under this model, CP’s high-efficiency dedicated trains will stretch from the current 112 cars, creating efficiency and capacity within the grain handling system, the company said. With the new shorter and lighter hopper-car fleet, CP said it will be able to fit 118 cars within the current 7,000 foot, 112-car unit train definition, adding approximately 16% more capacity per train. CP said it hopes to be able to eventually fit 147 of the new cars within the 8,500-foot train design, each carrying more grain than the retired cars.

Greg Aziz chairman ceo of National Steel Car
Gregory J. Aziz, chairman and CEO of National Steel Car

“National Steel Car is very pleased that CP has committed to this significant investment in our industry-leading, 5,431 cubic foot, high-efficiency, covered hopper grain car,” said Gregory J. Aziz, chairman and CEO of National Steel Car. “This newly designed and manufactured National Steel Car equipment will provide huge benefits to CP, our economy, and the entire grain delivery supply chain.”

In late May, Canadian National Railway Co. (CN) announced plans to acquire 1,000 new generation high-cube grain hopper cars over the next two years. The cars also will be built by National Steel Car.

Partners