|JJ Ruest, interim president and chief executive officer of CN|
“This substantial investment in higher capacity payload hopper cars, with up to 10% more capacity than the older generation, demonstrates our commitment to safely, efficiently and reliably moving the steadily increasing Prairie grain crop for our customers,” said JJ Ruest, interim president and chief executive officer of CN. “We clearly understand how important having an effective grain supply chain is to our nation’s reputation as a stable trade partner. With this week’s news of regulatory certainty, we can now make decisive long-term investments that will benefit the entire grain industry.”
The update to CN’s transportation cars comes after the Canadian government approved a bill on May 23 that includes provisions to make grain transportation by rail more efficient.
Canada’s wide-ranging Transportation Modernization Act is intended to help grains and other crops move more quickly to market after a winter in which CN and Canadian Pacific (CP) Railway Ltd. struggled to ship harvested grain in a timely manner.
|Lawrence MacAulay, Canada’s Minister of Agriculture and Agri-Food|
“I am very pleased to hear that CN is using the positive conditions brought in by Bill C-49, the Transportation Modernization Act, to invest in new hopper cars,” said Lawrence MacAulay, Canada’s Minister of Agriculture and Agri-Food. “This decision will help grow the agricultural sector by ensuring farmers are able to reliably get their products to market.”
The Transportation Modernization Act includes financial penalties for railways that fail to deliver promised rail cars for grain shipments on time. It also requires railways to publicly report each summer on their abilities to move that year’s grain crop, and to publish by Oct. 1 each year a winter contingency plan for keeping shipments moving regardless of bad weather.
CN is buying new, 55-foot eight-inch jumbo hopper cars with 5,431 cubic feet of capacity. CN’s 12,000-car Western Canadian grain fleet is comprised of CN-owned hoppers, leased cars and private customer equipment. The new hopper cars will allow the phase-out of older, lower-capacity cars from the CN-owned and leased fleet, which has an average age of more than 30 years.
“Canada’s grain hopper cars are rolling toward the end of their lives,” said Kyle Jeworski, president and chief executive officer of Viterra. “Over the last several years, Viterra has made significant, targeted investments in its country grain elevator network, and we welcome this major investment and commitment by CN to get Prairie grain to world markets.”
The cars will be built by National Steel Car Ltd. at the company’s Hamilton plant.
“We are very pleased that CN recognizes the benefits of our industry leading, high efficiency, 5,431-cubic-foot grain hopper car,” said Gregory J. Aziz, chairman and CEO of National Steel Car. “As a result of this order commitment from CN, National Steel Car’s Hamilton assembly operations will add over 300 new full-time employment opportunities. Coupled with CN’s order for 350 centrebeam lumber cars, this additional 1,000 grain car purchase will result in the hiring of more than 550 additional people at our Hamilton facility, which currently employees over 1,500.”
As part of CN’s C$3.4 billion capital program in 2018, the company is investing in new trade-enabling infrastructure this spring and summer, including building $400 million worth of new track and yard capacity to more efficiently handle increased traffic across CN’s West coast to Chicago corridor.
CN recently purchased 200 new GE locomotives to expand capacity for all customers, the first 60 of which will start to come online in June. Also, this year CN is acquiring 350 new lumber cars and leasing 350 new boxcars to boost its fleet serving forest products and metals business.
CN said it continues to hire, and approximately 1,250 more qualified train conductors will be in the field before next winter, compared to the number of conductors available heading into this past winter.