CN and CP quietly posted strong financial results and enhanced their networks even as economic storm clouds gathered

CN and CP quietly posted strong financial results and enhanced their networks even as economic storm clouds gathered

By Alex Binkley

Canada’s two major railways have quietly gone about their business in the past year turning in strong financial performances and building up their networks even as economic storm clouds gather. They overcame wicked winter weather to record a record grain haul for the crop year ending July 31. As of September, they were still enjoying overall traffic increases of about two percent compared to the same period last year while American railroads were suffering traffic drops.

CN’s and CP’s financial and operating results for the second quarter ended June 30 were both records. CN revenues increased by nine per cent to $3.96 billion while CP rose 13 per cent to $1.98 billion compared to last year. The growth in grain shipments came despite the restrictions on Canadian canola exports to China. CN moved more than 27 million tonnes, bettering its previous best of 26 million tonnes set in 2016-2017. CP hauled 26.8 million tonnes breaking its record set last year. (more…)

Government delays labour regulations that would have caused chaos for transport companies and shippers

Government delays labour regulations that would have caused chaos for transport companies and shippers

By Alex Binkley

A furious mid-summer protest by transport companies and shippers has won them a one-year exemption from several Canada Labour Code hours of work changes that could have created chaos in the federally-regulated air, marine, rail, and interprovincial trucking industries. They were scheduled to come into effect on September 1. The Labour Code changes were intended to provide better work-life balance and strengthen workplace standards in federally-regulated industries. They were buried in the 2018 Budget Implementation Bill passed last December. (more…)

Seaway examining new traffic growth ideas

By Alex Binkley

The St. Lawrence Seaway Management Corporation (SLSMC) and its shipper and shipping partners are looking at old and new possibilities for growing traffic. Transshipping Prairie crude oil to refineries in Quebec and Saint John as well as overseas customers, has been proposed before, and is still being looked at, says Bruce Hodgson, Director of Market Development for the Seaway Management Corp. “The dream isn’t going away.” Last fall, he told the Commons Transport Committee that shipping crude oil on the Seaway-Great Lakes is feasible. “We’ve worked very closely with the railways in developing the total supply chain.” Delivering crude in tank cars to Thunder Bay for loading on tankers means a much quicker turnaround of their cars for the railways rather than hauling the oil all the way to the St. Lawrence River. “The option we’ve been working on is Thunder Bay to Quebec City, and then transshipment into international markets,” Hodgson said. “We can be competitive.” A Seawaymax tanker can transport about 80,000 barrels of crude, which is about the equivalent of a unit train of crude. (more…)

Extending the Welland Canal season would generate more marine traffic, shippers say

Extending the Welland Canal season would generate more marine traffic, shippers say

By Alex Binkley

Keeping the Welland Canal open until mid-January would allow shipping lines to generate more business and ease highway congestion in southwestern Ontario, says Gregg Ruhl, the new President and CEO of Algoma Central. “If the Welland Canal were to remain open just a few more weeks, there would be hundreds and hundreds fewer trucks on the road,” he says. “The longer season should at least match the January 15 closing of the Soo Locks.”

Ruhl was Algoma’s COO when he proposed the longer shipping season to the Commons Transport Committee last fall as it held hearings across the country on a Canadian Transportation and Logistics Strategy. The committee released an interim report in late February that included a recommendation that Transport Canada work with The St. Lawrence Seaway Management Corp. (SLSMC) and its users “to explore ways to increase year-round use of the St. Lawrence Seaway to transport goods within central Canada.” The review “should consider such issues as icebreaking capabilities, piloting fees, handling fees at terminals and docking fees,” the MPs agreed. While the government has until mid-spring to respond to that recommendation, Bruce Hodgson, SLSMC’s Director of Marketing, said the issue is being discussed with domestic and international ship operators and shippers. “We’ve looked at the market and the indications are that a longer Welland season would generate additional business. We’ll work through the process of fully considering the idea.” One possibility would be keeping it open for a few more days in late December to see what happens, he said. (more…)

Pilotage costs and reforms remain sore points for Great Lakes transportation

By Alex Binkley

It doesn’t take long for an interview about shipping on the Great Lakes Seaway system to turn to the cost of marine pilotage. Few address the topic as bluntly as Bart Peters of Amsterdam-based Spliethoff Group. “Pilots in the U.S. basically have the freedom to make decisions about their own salary. They are running a government-sanctioned monopoly, there is no restriction on continuously increasing their costs, so there is no incentive whatsoever to ever bring costs down. Also, no one is ever responsible if things go wrong.” Unless the United States and Canada get serious about pilotage costs, “the Great Lakes trade will not develop any further,” he said. (more…)

Seaway optimistic its 60th anniversary will be a year of strong results

Seaway optimistic its 60th anniversary will be a year of strong results

By Alex Binkley

Having posted its best results in a decade last year, St. Lawrence Seaway Management Corporation (SLSMC) is hoping to better that performance in 2019 as its marks its 60th anniversary. The Welland Canal will open on March 22 followed by the Montreal-Lake Ontario section on March 26. The Soo Locks are scheduled to open March 25.

The 40.9 million tonnes of cargo that passed through the Seaway system in 2018 was 6.7 per cent higher than in 2017, and the best result since 2007. More than 12 million tonnes of grain passed through the waterway, the largest amount in two decades, and accounted for almost 20 per cent of the traffic. Dry bulk goods shipments came in at 10.7 million tonnes followed by iron ore at 7.3 million tonnes, trailed by liquid bulk, general cargo and coal. SLSMC has announced a toll rate increase of 1 per cent for the 2019 navigation season. (more…)