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Published June 30, 2014, 04:56 PM

CP developing new car ordering plan, adding grain cars

Canadian Pacific Railway says it will create a new grain car ordering system for its fleet, as well as add more cars. The announcement is in response to a June 20 order by the Surface Transportation Board requiring CP and Burlington Northern Santa Fe to develop a plan to catch up on severely late grain car shipments.

By: Mikkel Pates, Agweek

Canadian Pacific Railway says it will create a new grain car ordering system for its fleet, as well as add more cars. The announcement is in response to a June 20 order by the Surface Transportation Board requiring CP and Burlington Northern Santa Fe to develop a plan to catch up on severely late grain car shipments.

On June 27, CP said it had increased U.S. grain loadings by 27 percent since reporting to the STB in April, but acknowledges the “importance of continuing to respond to shipper requirements” and says it is committed to moving “as much grain as possible” on its U.S. network.

The two railroad companies had previously been ordered to report fertilizer shipment delays and progress on catching up, but that reporting period is over.

In the June 27 report, Keith Creel, CP president and chief operating officer, said the company would supply up to an additional 500 grain cars and is working with other railroads on fluidity, including “exploring new transportation options to avoid congested areas.”

CP said it would supplement 300 to 400 grain cars a week to the Rapid City, Pierre & Eastern Railroad based in Rapid City, S.D., which was sold to Genesee & Wyoming Inc. on May 31. To meet estimated demand for 2013 crops, CP expected to move 2,000 to 2,500 CP-supplied grain cars per week.

The amount shipped will depend on the “markets grain companies wish to ship, and the fluidity of the rail network through Minneapolis-St. Paul, Chicago and beyond,” CP says. Earlier in the spring, CP had attributed most of its delayed shipments to Chicago bottlenecks, but added there were more recent delays in the Twin Cities. The company noted that 70 percent of its wheat shipments are domestic and go through those two terminals.

New system

Beyond the current year, the company is developing a new grain car request system that will provide a “more efficient system for customers and the railroads to meet,” the report says.

Currently, CP has an order system that allows customers to make “unlimited car requests,” so the amount of cars requested or late doesn’t offer an accurate measure of demand, he said. Consequently, the railroad will offer a new Dedicated Train Program. It’ll also add a new method of managing less-than-trainload demand for the fall harvest.

“Recent experience has … illustrated that adding additional resources in congested areas can compound the problem,” Creel said.

CP said based on 2013 crop production data, it could have a backlog demand of 10,000 to 12,000 cars on its railroad. It has a total cumulative open request for 23,818 cars in North Dakota, 8,426 in Minnesota and 985 in Iowa. It says the average age of open requests is just more than nine weeks.

Mark Hovland, a Fessenden Co-op Association manager who is a member of the transportation committee for the North Dakota Grain Dealers, says he’d met with CP officials about the issue, but declined to comment in detail until it is clarified.

“There’s way too many loose ends on it yet,” says Hovland, whose elevator ships on both CP and BNSF.

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