CP Contract to Affect Ohio Valley Market

Canadian Pacific doesn’t own a foot of track in Ohio and the Port of Vancouver, British Columbia, is thousands of miles away, but the Buckeye State looks to benefit from a recent contract that CP reached that will increase its share of intermodal traffic in Vancouver.

CP will begin hauling starting April 1, about 85 percent of the Ocean Network Express traffic passing through the Port of Vancouver.

How does that affect Ohio? It will boost traffic in the Ohio Valley intermodal partnership that CP has with the Chicago, Fort Wayne & Eastern and Indiana & Ohio.

Ocean Network Express is a consortium of shipping companies K-Line, MOL, and NYK.

Canadian National has 70 percent of the container traffic moving through the Port of Vancouver, but CN officials say they will have to turn away some business due to capacity constraints.

International intermodal traffic moving on CN has experienced faster-than-expected growth and increases in traffic in frac sand, grain, and other commodities have left CN congested, particularly in Western Canada.

CP said the agreement with Ocean Network Express is worth $80 million annually over the three-year contract.

Interestingly, CP is gaining back traffic it walked away from when E. Hunter Harrison was CEO of CP because he thought domestic intermodal traffic was more profitable.

But now CP says its costs are similar to those of CN, which puts it in a position to vie for lower-margin international intermodal traffic.

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