CALGARY, Aug. 17, 2016 /PRNewswire/ - Canadian Pacific (TSX: CP) (NYSE: CP) is well-positioned and ready to move this year's western Canadian grain crop, which is forecast to be significantly bigger than the five-year average, to market.
CP is calling on all supply chain partners to work collaboratively to continue moving record amounts of grain, as CP did during 2013-14, 2014-15 and 2015-16 crop-years.
"To ensure success during this crop-year, the broader supply chain must work together to collectively harness our energy so that the entire Canadian economy can reap the maximum benefit," said E. Hunter Harrison, CP's Chief Executive Officer. "We have been preparing for this crop year for months and we are ready."
The grain supply chain in Canada, like most efficient supply chains, works best when demand is well-distributed throughout the year. The rail supply chain has returned to normal since the extraordinary crop and winter of 2013-14 and CP has continued to move record amounts of grain. This means there is now excess capacity in the supply chain, including thousands of rail cars in storage ready to move the latest crop.
CP continues to make significant investments in its infrastructure to move grain more efficiently. 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.
In order for the system to move record volumes of grain, it is essential that port terminals such as Vancouver operate on a 24/7 basis, remain fluid and that the seaway, especially the Port of Thunder Bay, be utilized to take pressure off Vancouver.
Grain is CP's largest line of business. Grain movement for the 2015-16 crop year was flat relative to 2014-15, 4.7 percent higher than our three-year average and 11.6 percent above our five-year average.
CP's development and innovation in 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.
Shippers who do not qualify for the DTP, or choose not to sign up for the program, can order cars in the open distribution program. Open distribution allows shippers to input orders for four times the car spot capacity at each facility at one time. As orders are filled new orders can be placed.
CP continues to work directly with customers to develop additional new commercial product offerings that provide guaranteed capacity to our customers.
"With innovative programs, a better-than-ever network, and a commitment to be the best we look forward to meeting the needs of our customers – we hope the rest of the supply chain is ready to do the same," Harrison said.
CP has also sent a letter to the federal ministers of transportation and agriculture outlining preparation for the crop year and calling for supply chain collaboration. It can be downloaded at www.cpr.ca/grain.
Note on forward-looking information
This news release contains certain forward-looking information within the meaning of applicable securities laws relating, but not limited, to our operations, priorities and plans, anticipated financial performance, business prospects, planned capital expenditures, programs and strategies. This forward-looking information also includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions and results of operations or performance. Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes. To the extent that CP has provided guidance using non-GAAP financial measures, the Company may not be able to provide a reconciliation to a GAAP measure, due to unknown variables and uncertainty related to future results.
Undue reliance should not be placed on forward-looking information as actual results may differ materially from the forward-looking information. Forward-looking information is not a guarantee of future performance. By its nature, CP's forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; changes in commodity prices; uncertainty surrounding timing and volumes of commodities being shipped via CP; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes. The foregoing list of factors is not exhaustive.
These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Item 1A - Risk Factors" and "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information" in CP's annual and interim reports on Form 10-K and 10-Q. Readers are cautioned not to place undue reliance on forward-looking information. Forward-looking information is based on current expectations, estimates and projections and it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by CP. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific (TSX:CP)(NYSE: CP) is a transcontinental railway in Canada and the United States with direct links to eight major ports, including Vancouver and Montreal, providing North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of Canadian Pacific.
SOURCE Canadian Pacific