Canadian Pacific’s carloads
Canadian Pacific’s (CP) total carloads fell 0.4% in the week ended March 18, 2017. The company hauled more than 31,000 railcars in the week, similar to its total carloads in the corresponding week of 2016. However, CP’s railcars excluding coal fell 1% YoY (year-over-year) to settle at ~25,000 units, compared to more than 25,000 units in the week ended March 19, 2016.
Canadian Pacific normally earns 70% of its revenue from Canada and 30% from the United States. CP’s coal carloads rose a slight 2.7% YoY in the 11th week of 2017, whereas Canadian National (CNI) reported a YoY rise of 12.4%.
Why coal carloads matter to CP
Coal accounted for 11% of Canadian Pacific’s (CP) revenue and 12% of its carloads in 2016. The company mainly transports metallurgical coal meant for export through Metro Vancouver’s port. Its coal traffic in Canada begins primarily at Teck Resources’ (TCK) mines in southeast British Columbia.
During the past year, coal production and demand have been under pressure due to depressed prices, environmental concerns, and a shift away from coal-fired power plants to natural gas–based electricity generation. US steel producers’ capacity utilizations didn’t see marked improvements in the recent quarter, either.
In the week ended March 18, 2017, Canadian Pacific’s major rising commodity groups were as follows:
- US grain
- potash products
- metals, minerals, and consumer products
- forest products
The major commodity groups that saw falls were as follows:
- Canadian grain
- fertilizer and sulfur
- chemicals and plastic
Next, we’ll take a look at the changes in Canadian Pacific’s intermodal traffic.