For more than 100 years, CP has been driving innovation within the grain supply chain. together with our supply chain enablers, we are creating opportunities for our customers to win market share at home and in the global marketplace.
Our 8,500-foot High Efficiency Product, or HEP train model, is revolutionizing grain transport. In the two years since introducing the 8,500-foot model, CP has consistently broken record after record for grain shipments. This wasn’t an overnight sensation but the result of years of meticulous planning, determination and commitment to make the 8,500-foot HEP train model a reality.
The size of grain trains and the elevator network matched to those trains has evolved over time. It was not that long ago that there were more than 1,000 grain elevators in Canada; today there are about 400, including 170 high-throughput elevators where 85-90 percent of grain is moved. For CP, the majority of the high-throughput elevators we serve were built to support the previous 112-car model. With advances in locomotive technology and a vision to maximize the efficiency of the grain train model, this is changing.
Below, Optimize Assets winners from left to right: Murray Hamilton, Assistant Vice-President Sales and Marketing Leah Kamp, Project Manager Industrial Development Curtis Wright, Manager Investment Analysis.
“Our customers know that to remain globally competitive they need to maximize the efficiency of their supply chains from countryside to port,” said Murray Hamilton, Assistant Vice-President Sales and Marketing. “CP’s development of the 8,500-foot HEP train is a critical enabler for them to achieve that goal. Our team works in lockstep with those grain customers wanting to adopt the HEP train model to capture those efficiencies and create capacity.”
That capacity allows us to move more grain out of the country and grow CP’s market share. This was the genesis of the 8,500-foot HEP train model.
Moving from the 7,000-foot (112-car) model to an 8,500-foot (134-car-plus) model equals an immediate 20 percent increase in capacity per train. The operational efficiency created by running longer trains using the same crews and the same train spots means there’s room on the network for other trains. “Next was figuring out how to best optimize that new train length to maximize loading capability and get the cycle time down. That’s when we started talking about loop tracks for grain,” said Hamilton.
CP customer Paterson Grain was an innovator and early adopter, being the first to build an 8,500-foot loop track at their Long Plain Terminal near Gleichen, Alta. in 2012, well before CP branded the HEP train product.
From concept to negotiation, Finance ensured there was a value proposition for CP and our customers.
“Finance conducted the economic analysis to determine the value of the cost savings driven by incremental operating efficiency gains, regulatory recovery mechanisms and implications to the Maximum Revenue Entitlement,” said Curtis Wright, Manager Investment Analysis.
Developing a standard for HEP-capable facilities involved collaboration with Engineering and Service Design, but Industrial Development guided the idea of the expansion to fruition. The physical limitations of an existing elevator, where to hold bad order set-offs and how to build a train ready for lift are just some of the factors the industrial development team considered to execute the efficiency track or loop model.
“Consistency and predictability in the project process benefits both CP and our customers, especially when there are multiple expansions happening at the same time,” said Leah Kamp, Project Manager Industrial Development.
“Our customers know that to remain globally competitive they need to maximize the efficiency of their supply chains from countryside to port. CP’s development of the 8,500-foot HEP train is a critical enabler for them to achieve that goal.”
– Murray Hamilton, Assistant Vice-President Sales and Marketing
Each elevator upgrade or greenfield build is different.
“The scope of the project varies. It could only need a few thousand feet of track and take a few months, or it’s a brand new build that takes years of preparatory work,” said Kamp.
Customers believe in this model and are making commitments with capital investment. Today, there are a dozen 8,500-foot capable elevators on CP’s network. By the end of 2020 this number will double and nearly 30 percent of grain trains will comprise the 8,500-foot HEP train product.
Murray, Kamp and Wright were integral in completing a long-term agreement with one of our largest grain customers, founded on the 8,500-foot HEP train model. This relationship will deliver significant incremental revenue and cost savings over the long term agreement and is the reason they were awarded a CEO Award for Excellence for Optimize Assets.
Revolutionizing the grain supply chain isn’t easy, but with the right vision, passion and commitment we are innovating to build a better future for CP and all grain supply chain stakeholders.