Canadian Pacific’s carloads
Canadian Pacific’s (CP) carloads fell 3.5% in terms of total railcars in the week ended December 31, 2016. The company hauled 26,000 plus railcars that week, compared with over 27,000 in the corresponding week a year ago. CP’s railcars, excluding coal, however, declined 6.4% to settle near 21,000 units in the 52nd week of 2016, against over 22,000 railcars in 2015.
Canadian Pacific normally receives 70% of its revenue from Canada and 30% from the United States. CP’s coal carloads jumped 9% to 5,400 railcars, which was, in percentage terms, three times the rise reported by Canadian National (CNI) in the week ended December 31, 2016.
Why coal carloads matter to CP
Coal accounted for 10.6% of Canadian Pacific’s (CP) revenue and 12.3% of its carloads in 3Q16. The company mainly transports metallurgical coal meant for exports through Metro Vancouver’s port. Its coal traffic in Canada begins primarily from Teck Resources’s (TCK) mines in southeastern British Columbia.
For the past year, coal’s production and demand have been under pressure due to depressed prices, environmental concerns, and a shift from coal-fired power plants to natural gas-based electricity generation. US steel producers’ capacity utilization didn’t see a marked improvement in the recent quarter either.
The commodity groups of US grain and potash rose in volume in the week ended December 17, 2016. Volumes of Canadian grain, forest products, crude, and automotive fell during the same week.
In the final part of this series, we’ll take a look at the changes in Canadian Pacific’s intermodal traffic.