Calgary Alberta - Canadian Pacific (CP), Canada's second-largest freight rail, registered a fall of 6 percent in total railcar units in the week ended 5 Mar 2016.
 
However, non-coal carloads went down by a marginal 2 percent, reporting only 24,300 units during the period, compared to 24,737 units during the same week in 2015.
 
The company received 70 percent of its revenues from Canada while 30 percent came from the US in 2015.
 
Overall, CP's drop in carloads was in tune with the overall declines in US and Canadian total weekly carloads, by 8 percent and 6.6 percent, respectively.
 
Why Coal Carloads Matter for CP
 
Coal accounted for 10 percent of revenues and 12.3 percent of carloads for CP in 2015.
 
Coal carloads for the company went down by 21 percent in the week ended 5 Mar 2016.
 
The company, by and large, transports metallurgical coal meant for export through Metro Vancouver's port.
 
CP's coal traffic in Canada begins primarily from Teck Resources' (TCK) mines in southeastern British Columbia.
 
In the US, the company moves thermal coal from connecting railways, serving the thermal coal fields in the Powder River Basin in Montana and Wyoming, where Alpha Natural Resources (ANR), Black Hills (BKH), and Peabody Energy (BTU) have coal mines.
 
For the past year, coal production and demand have been under pressure due to depressed prices, environmental concerns, and the shift from coal-fired power plants to natural-gas-based electricity generation.
 
However, TCK has issued a slightly higher production guidance for 2016 over 2015.
 
If this goes according to plan, then we should see more coal hauling by CP in 2016.
 
Anonymous Author.