Canadian Pacific’s carloads
Canadian Pacific (CP) registered a fall of 2.7% in total railcars in the week ended July 2, 2016. The company hauled nearly 29,000 railcars in the same week against 29,000 plus railcars in the corresponding week last year. The company’s railcars excluding coal also went down 5.9% to settle just above 22,000 in the last reported week of 2016.
The company received 70% of revenues from Canada, while 30% came from the US in 2015. CP’s weekly fall in total railcars was higher than the overall total fall in US railcars but lower than Canada’s fall in the same category. In sharp contrast with rival Canadian National (CNI), CP’s coal carloads were up 10.8% in the reported week of 2016 at 6,300 units against 5,700 units in the week ended July 4, 2015.
Why coal carloads matter for CP
Coal accounted for 10% of revenues and 12.3% of carloads for CP in 2015. CNI reported higher coal volumes in the reported week of 2016 than CP, which primarily transports metallurgical coal meant for export through Metro Vancouver’s port. Its coal traffic in Canada begins primarily from Teck Resources’ (TCK) mines in Southeastern British Columbia.
In the last one year, coal’s production and demand has been under pressure due to depressed prices, environmental concerns, and a shift of coal-fired power plants to natural-gas-based electricity generation. However, TCK has issued slightly higher production guidance for 2016 compared to last year.
If this goes according to plan, then we should see either more coal hauling by CP in 2016 or less contraction in the company’s coal volumes in the same year compared with rival CNI.
Rising and falling commodity groups
Commodity groups such as US grains, potash and fertilizer, and automotive were up in the week ending July 2, 2016. On the contrary, volumes of Canadian grain, forest products, chemicals and plastics, and crude were down in the same week.
You can compare this week’s rail data with data from the previous week in Why the Week Ending June 25 Was a Mixed Bag for Rail Traffic.