It was an impressive final quarter for Canadian Pacific (CP), which led to a bunch of new records in 2018.
In a press conference recently, the national railway company announced it set new revenue records for both the fourth quarter and the full year. CP took in $2 billion over the final three months of 2018 — a jump of 17 per cent (about $300 million) over the same period in 2017 — on its way to making $7.3 billion in revenue throughout the year.
In addition, CP generated an operating ratio of 56.5 per cent and record operating income of $874 million over those last three months.
“CP’s impressive fourth-quarter operating results are a testament to the hard work and dedication of our 13,000 strong CP family — who continue to safely and efficiently deliver for our customers and the North American economy,” said Keith Creel, CP President and CEO.
“The power of the CP operating model is evident in the strong performance across the company.”
Equally impressive, according to Creel, was CP’s improvement in other key metrics such as an industry best improvement on fuel efficiency of three per cent, an increase in overall train speed of three per cent and dramatic rises in two important safety categories.
“Most importantly, and above all else. this was all executed safely,” said Creel.
CP saw a 14 per cent improvement in personal injuries on the job and a 31 per cent betterment on train accidents in the fourth quarter.
“That said, 2018 was the best ever for personal injury as well as the 13th straight year CP has had the lowest train accident frequency ratio in industry,” he added.
John Brooks, CP senior vice-president and chief marketing officer, explained it wasn’t simply one sector that contributed to the company’s success.
“While freight revenue went up 18 per cent in the fourth quarter, CP saw record growth across every line of the business for second straight quarter,” he said, noting overall revenue in 2018 rose 12 per cent.
“And that didn’t’ happen by accident, it was on the back of our industry best service.”
Grain is the train
Brook added that Canadian grain shipments rose seven per cent in the last quarter, helping CP surpass its previous record set in 2017.
“However, that was partially offset by continued weakness in the U.S. grain market, which was down 18 per cent,” he said.
While Canadian grain is expected to gain strength over the next six months, the market south of the border is anticipated to remain volatile.
In a year when record setting for CP is a trend, the last quarter was the fourth in a row where potash broke its previous record, rising 24 per cent, while the energy/chemical/plastics sector shot up 48 per cent — with crude being the being contributor at around 25,000 car loads. However, Brook noted nearly half of that increase came from more shipments of liquefied natural gas, refined and bio fuels.
“We enter 2019 with tremendous momentum and rest assured we are poised for another record setting year,” Creel stated.
CP is also happy with being able to grab some labour peace for the next couple years with two settlements made in 2018.