Rail deal spurs move to greater shipping efficiencies

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This article was published 27/06/2023 (1202 days ago), so information in it may no longer be current.

With the official closing of Canadian Pacific Railway’s acquisition of Kansas City Southern in April, its Canadian grain shipping business is getting much more serious about becoming more efficient.

On Monday, Richardson International Limited announced it will be upgrading eight of its Western Canadian grain elevators that are served by CPKC to the railway’s 8,500-foot High Efficiency Product (HEP) model.

That means these eight elevators — as well as a newly built Richardson elevator in Carmichael, Sask. — will be able to handle CPKC trains that are 8,500 feet long, which are about 20 per cent longer than the traditional 7,000-foot-long trains.

In addition to the increased shipping efficiency, the elevator must also be able to completely load the longer trains in 16 hours or less and have a long enough lead track to be able to receive the train off the main line.

Joan Hardy, the railway’s Winnipeg-based vice-president sales and marketing for grain and fertilizers, said the railway’s 8,500-foot HEP model, which was launched in 2018, is all about achieving greater efficiencies.

“We’re excited about the ability for us to service them even more effectively. Richardson is a very, very important partner with CPKC with all their grain elevators, canola and oat processing, and now the largest durum mill in North America, on our CPKC network. It’s exciting in many different angles,” she said.

Richardson has 27 elevators across Western Canada that are served by CPKC and one in the U.S. When they finish this expansion, nine of them will be able to handle the longer trains.

“Richardson is committed to Canadian farmers and providing growers with modern, high-efficiency facilities and services,” said Darwin Sobkow, Richardson’s president and COO. “Expanding eight elevators will increase capacity and efficiency, enabling Richardson to further benefit from CPKC’s single-line network reaching Canada, the U.S. and Mexico.”

In 2021, Richardson acquired Italgrani USA Inc., which included the largest North American durum mill located in St. Louis, Mo.

The merged CPKC single-line network creates a seamless pipeline to the Italgrani mill from the durum-rich areas in Saskatchewan, where Richardson elevators are well positioned.

The 8,500-foot HEP model also includes a premium rate and service package, Hardy said. In addition to increased shipping capacity, the HEP model includes use of the CPKC locomotive attached to the train, which means the elevator does not have to have its own locomotive

Since it will have the CPKC locomotive on site, they don’t have to wait for a new locomotive to be marshalled back to the site, which brings with it other operating efficiencies.

A total of 39 elevators in Western Canada that CPKC services are qualified for the 8,500-foot HEP model, which makes up about 43 per cent of its train loading grain elevator sites capable of the larger capacity, Hardy said.

In addition to the new Richardson sites that will be expanded, 10 other elevators CPKC services — owned by other grain handling companies — will be expanded between now and the end of 2024.

“By then more than 60 per cent of our unit train grain loading facilities in Canada will be 8,5000 foot HEP qualified,” she said.

“We are really hitting a critical mass.”

martin.cash@freepress.mb.ca