Hunter Harrison: We’ll move that grain—with your cooperation

Canadian Pacific CEO Hunter Harrison says his railroad is ready to move Western Canada’s delayed grain crop to market, provided there is “supply chain accountability,” which will be measured in a new supply chain scorecard CP has developed.

“We have all the assets in place to move the crop to market, but given wet weather, snow and other factors, the vast majority of the crop is not yet ready to move,” said Harrison. “While CP is just one part of the global supply chain, we are taking a leadership role in ensuring the supply chain works together so that the Canadian economy—including farmers and shippers—reaps maximum benefit.”

Harrison notes that despite forecasts for a record or near-record crop and CP’s early preparations, as a result of the delayed harvest, year-to-date CP has moved less Canadian grain than in 2014-15 and less than the three-year average. “In each of the past three full crop years, including during the extraordinary winter and crop of 2013-14, we moved record volumes of grain,” he said. “The grain supply chain in Canada, like most efficient supply chains, works best when demand is well-distributed throughout the year.”

“We remain committed to working with the supply chain to move Canadian grain to market, as opposed to the finger-pointing of the past,” said Harrison. “Our supply chain is built to deliver grain throughout the year and depends on all the various pieces working together collaboratively. Our new supply chain scorecard will help tell that story while holding us and the rest of the supply chain accountable.”

Harrison said that CP has been collaborating closely with Canadian government officials to develop a system “that will allow for open and transparent sharing of information to government on its grain movements.” In addition to the information being shared with Transport Canada, and consistent with data provided following the 2013-14 crop year and the minimum mandate, CP is voluntarily launching a weekly supply chain scorecard on Wednesday, Oct. 19 at www.cpr.ca/grain. The scorecard will outline CP’s performance for the previous grain week and will include, when necessary, detailed information on any internal or external factors affecting grain movement.

“CP continues to make significant investments in its infrastructure to move grain more efficiently,” the railroad said. “Over the past few years, CP has invested record amounts of private sector capital into capacity-building improvements to meet the expanding needs of our customers. Recent supply chain partner investments are encouraging, especially in grain country elevator capacity and port capacity. These investments in all of the interconnected elements of the supply chain are critical to a strong, efficient and reliable system that has the capacity to move Canada’s grain crop each year.”

CP said its Dedicated Train Program (DTP) “provides customers with greater clarity and control of car supply to manage their supply chain. CP has received positive feedback on this service, which allowed customers to have a clear and guaranteed amount of rail capacity. As customers utilize these assets more effectively, through either investments or by operating more efficiently, they receive the direct benefit.”

CP also sent a letter under Harrison’s signature to Canada’s federal ministers of transportation and agriculture outlining preparation for the crop year and calling for supply chain collaboration. Among many other points, Harrison stressed that, in order for the system to move record volumes of grain, “it is essential that port terminals such as Vancouver remain fluid, and that the Seaway, especially the Port of Thunder Bay, stays open as long as possible. Thunder Bay is an important outlet for Canadian grain. Its closure from late December to March/April every year significantly reduces grain supply chain capacity. Utilizing other outlets like Thunder Bay takes pressure off Vancouver. Over the past few years we have seen ever-increasing dependence on Vancouver as an outlet for Canada’s grain. Like all terminal complexes, Vancouver has finite capacity; trying to push more grain than can be accommodated causes congestion that ripples through the entire system. It’s like putting more trucks onto an already gridlocked highway.”

CP’s letter can be downloaded at the link below.