In response to a request last week by the Surface Transportation Board, Canadian Pacific has said it will not add any capacity in order to increase the flow of fertilizer to farmers in the Midwestern states.
The railroad will, however, offer a train pair from Canada to the U.S. to support grain and fertilizer moves, and “heighten the visibility for agricultural fertilizer shipments at the field operational level,” according to a letter to the STB sent by CP President Keith Creel late Friday. He also wrote that CP will let private cars ship fertilizer on its network.
Creel did note that CP has a 10-percent presence in the fertilizer shipment market, and that he doesn't see a huge uptick in volumes coming. For these reasons, adding significant capacity is unnecessary, he wrote. Minnesota is CP’s biggest market for fertilizer each year, and the state only sees an average of 27 rail cars of fertilizer annually. The other states the STB is concerned about see anywhere from one shipment each year to 13 shipments annually, Creel wrote.
Creel added that it is “near impossible for CP to give guidance on what will be moving over the coming months” because most of the fertilizer moves in customer-supplied cars.
“As a result,” he continued, “we do not have visibility on demand beyond when a car is tendered to the railway. And as a residual player in this market, CP understandably does not hold significant assets to protect seasonal business that for us is episodic. In addition, much of this traffic comes to us over interchanges where, again, we do not have visibility on what can be expected until presented by another carrier.”
The Surface Transportation Board had given Canadian Pacific and BNSF until Friday to report their plans for fertilizer delivery to make sure U.S. farmers have enough shipments to ensure the successful spring planting of crops.
The decision stems from an April 10 hearing during which farmers and agricultural officials detailed a pressing need for fertilizer and tight spring planting deadlines.
“CP understands the urgency of moving last year's grain harvest out and moving fertilizer and nutrients in for the next planting season,” he wrote. “CP is committed to doing its part. We anticipate that relief from extreme winter and easing of congestion in Chicago will result in lower transit times for all shipments, including these shipments.”
BNSF told the STB last week it will add 110 jumbo hopper cars to its existing fertilizer fleet, better manage crew availability at facilities, and work to improve turnaround time at those facilities.