Leading The Charge

David Przednowek, CN, Canada, provides an overview of the evolution of the grain supply chain in western Canada.

There has been a lot of change in the end-to-end grain supply chain in western Canada since the first elevator was built in western Canada in the early 1880s. Before the country elevator arrived, grain was bagged, delivered to flat warehouses, and shipped by rail in boxcars. Wooden elevators dotted the country landscape in western Canada through the 20th century, with the peak number of elevators hitting approximately 6000. Over time, wood has given way to high capacity concrete and/or steel facilities loading 100+ cars in a single placement, and the horse-drawn wagon and 3 t grain truck have been replaced with the Super B delivering 40 t of grain or more at once. It was only the early 1990s that saw the first-generation 100+ car loading facilities begin to emerge. There has been a flurry of activity in new elevator construction over the past seven years in particular, and CN is proud that customers have chosen to locate 70% of the new high throughput elevators built in western Canada since 2015 on CN lines.

Figure 1. Davidson, Saskatchewan, Canada.

Besides brand new elevators, customers located on CN have also been investing in expanding existing facilities by increasing capacity to accommodate unit trains, as well as taking advantage of CN’s rate incentive structure to make rail operations more effi cient. Well ahead of the curve, fi ve years ago CN introduced a unique customer incentive called the Winter Ready programme to encourage investment in infrastructure that allows for more effi cient rail operations, especially during winter. Before a loaded grain train can be pulled from a loading origin, the train’s braking system must be charged with air to allow for safe train operation. In extreme winter temperatures, the duration of time required to fully charge a train with air can represent a signifi cant loss in productivity. Today, over 90% of CN’s grain unit train loaders in western Canada have taken advantage of this win-win solution – saving up to 12 hours in cycle time in the coldest winter conditions.

Last summer CN rolled out a new rate incentive structure, building on the Winter Ready programme. CN’s Ready Train Incentive encourages grain customers to invest in hook-and-haul infrastructure, saving time and creating capacity. Qualifying facilities must be able to receive and release 100+ cars on a single length of track – not multiple ladder tracks that take longer to serve going in and out. The facility must be equipped with a power switch that can be operated remotely by CN, making for safer, more effi cient rail operations, and a train must be loaded in less than 15 hours. The faster a train can clear the CN main line, the more capacity is freed up to move all the other traffi c running on the line – including more grain.

Of all the loop track country elevators in western Canada, CN accesses two out of three, and most of those are served exclusively by CN. If overall cycle time can be reduced by even one or two days per trip, that translates into a savings of weeks over the course of the crop year, meaning more trips can be made with that set of hoppers – and that ultimately means more grain moving on CN’s network.

Figure 2. G3 Terminal in Vancouver, BC, Canada.

Figure 3. Davidson, Saskatchewan, Canada.

Hopper car fleet innovation

CN’s approach to fleet composition for the movement of bulk grain has fundamentally changed over the past fi ve years. What was once a fleet dominated by leased and owned CN-supplied hoppers is now much more diverse. It includes customer-supplied high capacity hoppers integrated into CN’s common pool; brand new CN hopper cars; and high capacity, customer-controlled private cars. It does not matter to a producer whether it is a CNsupplied hopper car or a customer-supplied hopper car being spotted for loading at a grain elevator – those hoppers are making space for more grain to be delivered – and a tonne delivered is a tonne paid for.

Steady growth in the car spotting programme in western Canada

CN’s Grain Plan for the 2021 - 2022 crop year included guidance on CN’s maximum sustainable end-to-end grain supply chain capacity for bulk grain movement for both CN-supplied hoppers and private hoppers combined – 6900 hoppers per week outside of winter and 5350 hopper cars per week during winter. Positively, the size of the hopper car spotting programme that CN delivers on a weekly basis has kept up with the annual compound growth increase in the size of western Canadian grain production.

The shift to private cars – in corridors where it is operationally effi cient to do so – is a fundamental change in how customers can secure car supply to move grain on CN in western Canada. What was once 10 or 20 private cars per week has increased to more than

1000 cars per week at times. Additionally, a large segment of this car supply is comprised of new generation, high capacity cars.

The next generation of high effi ciency hopper cars

For quite some time, a signifi cant portion of the overall grain hopper car fleet operating in western Canada has been approaching the end of its useful life. Provincial and federal government hopper car build programmes from the 1970s into the early 1980s brought approximately 10 000 hopper cars into service for grain movement. Most of these hopper cars were low capacity, 59 ft long, 4550 ft3 cars weighing 63 000 lbs empty (tare weight). Over time, the market evolved, and the jumbo 5150 - 5250 ft3 capacity hopper car came onto the scene, with an average length of 58 ft.

In spring 2018, due in part to the investment certainty bought about by changes in the Government of Canada’s maximum revenue entitlement concerning grain movement from western Canada to the Ports of Vancouver, Prince Rupert, and Thunder Bay, CN embarked on a signifi cant hopper car fleet renewal programme, announcing the acquisition of 1000 new generation, high capacity hopper cars. CN followed up this announcement in July 2020 with the announcement of the acquisition of an additional 1500 high capacity hopper cars.

Compared to the old Government of Canada hopper cars, these new high capacity hopper cars are signifi cantly shorter in length, allowing eight to 10 more cars to be fi t on the same length of track. Furthermore, at a capacity of 5431 ft3, the new hopper cars are almost 900 ft3 greater in maximum grain handling capacity compared to the Government of Canada hopper cars. Recognising that different types of grain have different densities, combined with the fact that the maximum permissible weight of a loaded hopper car varies depending on track characteristics (to a maximum of 286 000 lbs gross weight), the increase in maximum payload varies. For example, wheat density is roughly 48 lb/ft3 compared to 40 lb/ft3 for canola. The biggest incremental pick-up for the new high capacity cars is with lighter density commodities such as canola, barley, and oats. Over the past four crop years, as a result of the wide variety of fleet solutions that customers are able to utilise, average tonnage shipped per car on CN out of western Canada has increased by over 4 t, or over 4%. Moving more tonnage per car means moving more tonnage during peak hopper car demand in the autumn and winter months after harvest. That also means grain producers being able to deliver more grain into the country elevator network.

Between loading more tonnage in each car and being able to spot and pull more cars on the same length of track at the origin loading facility, the incremental tonnage gain adds up fast, especially for lighter density commodities – almost 20% more wheat moved per train and almost 40% more canola where a high effi ciency loop track facility is considered.

In May 2021, CN announced its purchase for 1000 new generation, high capacity hoppers. This acquisition is part of a larger programme to renew a fleet of 3500 hopper railcars over the next three years. Building on CN’s ongoing grain hopper car fleet renewal programme that began in August 2018, CN’s new generation hopper car fleet will grow to 6000 hopper cars.

Closing the loop

The most effi cient supply chain model for grain unit trains is hook-and-haul at both ends with one carrier in the route – and that carrier will be CN for two state-ofthe-art grain export terminals in the Port of Vancouver.

Besides the signifi cant leaps forward in grain handling and shipment effi ciency being driven in the Prairies of western Canada, the grain supply chain has taken another huge step forward that will allow the effi ciency of the loop track country elevator model to be fully realised. Two brand new export terminals in the Port of Vancouver – served exclusively by CN – have recently opened. The fi rst of these facilities built by

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Figure 4. Vegreville, Alberta, Canada.

Figure 5. Maymont, Saskatchewan, Canada.

G3 Canada Limited on the North Shore of Vancouver is equipped with three loop tracks, with the largest capable of accommodating trains up to 8793 ft in length; trains will unload in continuous motion using the same motive power that delivered the train to the facility.

The second is Fraser Grain Terminal, which is a partnership between Parrish & Heimbecker and GrainsConnect Canada. This state-of-the-art facility is served directly by CN and is able to receive up to 120 car trains on a semi-loop. It will create an additional 3.5 million t of nameplate export capacity on the west coast of Canada.

Having just one rail carrier in the route is where there are additional supply chain effi ciencies to be had in the model for these two new export destinations for grain – no complex hand-offs between carriers requiring extra co-ordination and planning to suit limited planning windows at extremely busy ports. This model is also ideal for private cars – the ability to keep a private, customer-controlled unit train cycling as a discrete set without breaking up the train to spot into ladders is the ultimate in effi ciency.

Investing in the future

All of the players in the end-to-end grain supply chain, including CN, grain companies, and grain producers, have been making signifi cant capital investments to increase productivity and effi ciency. CN is seeing the benefi ts of CN’s CAN$10 billion worth of investments in the last three years to extend rail sidings, double mainline tracks, acquire 260 new high horsepower locomotives, and acquire new high capacity grain hopper cars, as well as investing in safety and capacity-enhancing technologies. Besides close to 150 miles of double tracking projects, CN added a number of long sidings and carried out a series of major yard expansions across western Canada.

CN plans to spend CAN$3 billion of new capital investments in 2021, maintaining its North American leading position among Class I railways in terms of capital investment as a percentage of annual revenues in an industry that is a leader amongst industries in this regard. The investments include many major, multi-year maintenance and capacity-enhancing projects, all aligned to market demand. There is over CAN$1.5 billion on track maintenance to support safe and effi cient operations, including the replacement of rail and ties, bridge improvements, as well as other general track maintenance. CN plans to spend more than CAN$250 million on new track capacity, which includes double tracking projects along with the construction of new sidings and yard track expansion projects. And there is more than CAN$100 million on strategic projects in technology to enable the next competitive level of modern railroading operation, such as rail automation, dispatching systems, mobility, and inspection systems.

Leading the charge

CN’s innovative approaches to hopper car fleet supply and management, combined with strong operational performance and signifi cant investment in network infrastructure and other resources, have translated into stronger grain movement and have contributed to CN recording its best ever grain shipment volume during the 2020 - 2021 crop year. CN moved over 31 million t of Canadian grain via carload in the 2020 - 2021 crop year, exceeding the previous record set in 2019 - 2020 by over 1.6 million t. CN also moved over 1.1 million t of grain direct from western Canada in containers, in addition to volumes moved via container from eastern Canada. CN also recorded 14 consecutive months of record grain movement between March 2020 and April 2021. This record grain supply chain performance also occurred at a time when overall traffi c levels, from September 2021 forward, were actually higher than at the same time the year previous, with CN also notching monthly record volumes for commodities such as intermodal, lumber, propane, and fertilizer shipments.

As a backbone of the economy, CN remains committed to ensuring it evolves as the grain landscape in western Canada continues to strive for greater effi ciency to help move grain to market. The future is bright for the grain business in western Canada, and CN is working with its supply chain partners to be leading the charge.