CALGARY, June 7, 2018 /CNW/ - Canadian Pacific Railway
Limited (TSX: CP) (NYSE: CP) announced today it plans to
invest more than a half-billion dollars on new high-capacity grain
hopper cars as part of its commitment to the North American
agricultural sector. CP grain shippers can expect to see more than
500 of these new cars in service before the end of 2018, enabling
CP to transport more grain in each dedicated train.
"For more than 100 years, grain has been embedded in CP's DNA,"
said CP President and Chief Executive Officer Keith Creel. "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."
CP's plans for revitalizing its grain hopper fleet begin with an
initial order for 1,000 cars from National Steel Car of
Hamilton, Ont. Over the next four
years, CP plans to order approximately 5,900 hopper cars in total,
enabling a complete removal of all low-capacity hoppers, including
all Government of Canada cars,
from the 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.
"CP's investment in new hopper cars will directly benefit
Canada's farmers, grain shippers
and the economy as a whole," said Canada's Minister of Agriculture and
Agri-Food, Lawrence MacAulay. "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."
The new car design is shorter, lighter and can carry more grain
than the cars being retired from CP's fleet. The new cars feature a
three-pocket design that can be loaded and unloaded more
efficiently than the old four-pocket government cars. The new
hopper cars can handle more than 15 percent greater volume and 10
percent 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 cars will feature newly manufactured components
that are more reliable, significantly reducing maintenance-related
delays.
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. With the new shorter and lighter hopper-car fleet,
CP will be able to fit 118 cars within the current 7,000 foot,
112-car unit train definition, adding approximately 16 percent more
capacity per train. CP will eventually be able to fit 147 of the
new cars within the 8,500-foot train design, each carrying more
grain than the retired cars. This translates into more opportunity
for the movement of grain in the future, supporting the anticipated
continued growth in crop production across the prairies. The future
of grain at CP is one of increasing efficiency that will benefit
grain shippers, farmers, port terminals and CP's network.
"We are excited about this significant enhancement to CP's
fleet," said Andrew Paterson,
President and CEO of Paterson GlobalFoods. "With our growing
network of facilities capable of handling 8,500-foot trains, this
highly efficient hopper car capacity will benefit our supply chain
and support the growth in volumes that we are pursuing in the
competitive western Canadian marketplace."
"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. This newly
designed and manufactured National Steel Car equipment will provide
huge benefits to CP, our economy, and the entire grain delivery
supply chain," said Gregory J. Aziz,
Chairman and CEO of National Steel Car. "Our history with CP dates
back to the founding of our Company in 1912 when CP placed the
first order ever built by National Steel Car. We are certain that
our founders celebrated then almost as much as our team members are
today! As a result, National will have the opportunity to hire and
train several hundred additional personnel, who are seeking
permanent long-term careers, in a variety of disciplines. Thank you
CP for extending, yet again, our 106-year partnership in
progress."
CP continues to add employees and locomotives to meet the needs
of our customers across North
America. More than 700 new employees are now in various
stages of training system-wide, and 100 locomotives will join the
fleet before summer's end. These include remanufactured
high-horsepower General Electric locomotives.
CP continues to deliver for the Canadian agricultural industry,
with total volume of the 2017-18 crop year delivered through early
June at nearly 22 million metric tonnes, or 1 percent ahead of the
prior year's pace.
"I applaud Parliament for its passage of the Transportation
Modernization Act, which supports the supply-chain innovation we're
announcing today," Creel said. "It's a bill notable not only for
this grain enhancement, but for enabling the use of data from
locomotive voice and video recording equipment as a proactive
measure to improve railway safety. This act is truly a step forward
for efficiency and safety in Canada's rail sector."
Forward looking information
This news release
contains certain forward-looking information within the meaning of
applicable securities laws relating, but not limited to, capital
investment in CP's grain hopper fleet, CP's business, operations
and service. This forward-looking information also includes, but is
not limited to, statements concerning expectations, beliefs, plans,
goals, objectives, assumptions and statements about possible future
events, conditions, and results of operations or performance.
Forward-looking information may contain statements with words or
headings such as "financial expectations", "key assumptions",
"anticipate", "believe", "expect", "plan", "will", "outlook",
"should" or similar words suggesting future outcomes.
Undue reliance should not be placed on forward-looking information
as actual results may differ materially from the forward-looking
information. Forward-looking information is not a guarantee of
future performance. By its nature, CP's forward-looking information
involves numerous assumptions, inherent risks and uncertainties
that could cause actual results to differ materially from the
forward-looking information, including but not limited to the
following factors: changes in business strategies; general North
American and global economic, credit and business conditions; risks
in agricultural production such as weather conditions and insect
populations; the availability and price of energy commodities; the
effects of competition and pricing pressures; industry capacity;
shifts in market demand; changes in commodity prices; uncertainty
surrounding timing and volumes of commodities being shipped via CP;
inflation; changes in laws and regulations, including regulation of
rates; changes in taxes and tax rates; potential increases in
maintenance and operating costs; uncertainties of investigations,
proceedings or other types of claims and litigation; labour
disputes; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; currency and interest rate fluctuations;
effects of changes in market conditions and discount rates on the
financial position of pension plans and investments; and various
events that could disrupt operations, including severe weather,
droughts, floods, avalanches and earthquakes as well as security
threats and governmental response to them, and technological
changes. The foregoing list of factors is not exhaustive. These and
other factors are detailed from time to time in reports filed by CP
with securities regulators in Canada and the
United States. Reference should be made to "Item 1A - Risk
Factors" and "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Forward-Looking
Information" in CP's annual and interim reports on Form 10-K and
10-Q. Readers are cautioned not to place undue reliance on
forward-looking information. Forward looking information is based
on current expectations, estimates and projections and it is
possible that predictions, forecasts, projections, and other forms
of forward-looking information will not be achieved by CP. Except
as required by law, CP undertakes no obligation to update publicly
or otherwise revise any forward-looking information, whether as a
result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific is a
transcontinental railway in Canada
and the United States with direct
links to major ports on the west and east coasts, providing North
American customers a competitive rail service with access to key
markets in every corner of the globe. CP is growing with its
customers, offering a suite of freight transportation services,
logistics solutions and supply chain expertise. Visit cpr.ca to see
the rail advantages of CP. CP-IR
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SOURCE Canadian Pacific