Subscribe to our free, weekly email newsletter!


Railroad shipping: CP, Teck reach 10-year deal for coal exports

By Jeff Berman, Group News Editor
October 07, 2010

Class I railroad carrier Canadian Pacific Limited and Teck Resources Limited said they have inked a 10-year deal in which CP will transport Teck’s steelmaking coal from five Teck-owned mines in southeast British Columbia to Vancouver-area ports.

This arrangement is expected to begin on April 1, 2011.

CP officials said this deal reflects the companies’ commitment to work together to achieve growth in the volume of coal shipped through a range of economic and marketplace dynamics and provides for flexibility over the long term, as well as provide for CP investments that enhance coal handling capacity to provide for Teck’s volume growth.

In April, CP and Teck reached a one-year agreement for CP to transport metallurgical coal from Teck’s CP-served mines in southeast British Columbia to Kamploops- and Vancouver-area ports for export. When this deal was struck, CP said that during the term of this contract, CP and Teck plan to discuss a longer-term arrangement.

“CP is delighted to have participated in the creation of a unique and collaborative agreement that sets the foundation for the next decade,” said CP President and CEO, Fred Green in a statement “Our ongoing dialogue has provided new and deeper insight into Teck’s growth objectives. Importantly, the agreement provides the stability and confidence to grow our business and enhance this world class supply chain for our mutual benefit.”

In 2009, CP carried roughly 305,000 carloads of coal, and in 2008, CP carried approx 318,000 carloads of coal. The majority of these carloads are Teck coal, CP told LM.
“Teck Coal Limited mines in southeastern British Columbia produce high quality metallurgical coal,” said Mike LoVecchio, CP Senior Manager-Media Relations, in a previous interview. “The coal is largely exported to processors in Asia via coal terminals at the Port of Vancouver. Canadian Pacific tracks directly connect Teck’s coal mines and the terminals, providing an integrated export supply chain. CP runs unit coal trains in a dedicated loop between the mines and the Coast.”

JP Morgan analyst Tom Wadewitz commented in a research note that there is likely incentive for both parties to work together to grow volumes and increase capacity between the mines and the Vancouver ports., adding that he suspects CP will pursue expensive infrastructure investment along its main line in the Canadian Rockies.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Intermodal units, at 278,767 containers and trailers were up 6.7 percent compared to the same week last year and marks the third best week for intermodal ever recorded based on AAR’s data.

LM Group News Editor Jeff Berman recently conducted a wide-ranging interview with Bobby Harris, President and CEO of non asset-based 3PL BlueGrace Logistics about various aspects of the freight transportation market.

It’s small, but senior brass at YRC Worldwide will take it. After nearly seven years of continuing losses in excess of $2.6 billion, the parent of the nation’s second-largest LTL carrier posted a narrow net profit in the third quarter ended Sept. 30.

As was the case for the second quarter, third quarter earnings results for publicly-traded less-than-truckload (LTL) carriers are again strong. Signs of solid earnings results from carriers that have posted earnings to date include tonnage increases, gains in weight per shipment and average daily shipments, higher yield, and revenue per hundredweight.

While the holiday season is known to bring good tidings and cheer to all, it may also come with another thing that is not so pleasant: higher rate freights. That was the thesis of a commentary written by Mark Montague, industry pricing analyst and chief market-watcher for DAT, a Portland, Ore.-based subsidiary of TransCore.

Article Topics

News · Teck · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA