Why we should take a look at Canada’s rail freight market
A new report says there’s more than a $1 billion worth of freight that has yet to be shipped through the country’s rail network.
It also says freight volume is growing at a steady pace, and is poised to increase over the next decade.
The Canadian Association of Railways (CAR) report, released Wednesday, highlights that in 2016, Canada had the most freight volume of any country on the continent, and in 2019 that figure was expected to surpass that of the United States.
“We’re going to continue to see this growth for the next 10 years and that’s a big deal,” said Gary Dickson, CEO of the Canadian Association for Railways.
Dickson is calling for an increase in freight rail service by 10% over the coming decade.
He says this would allow Canada to achieve its goal of a 30% increase in passenger rail traffic by 2030.
He also says the growth will require increased capacity to accommodate more trains and a greater number of freight cars on the rail network, and that will require an increase of some 1,200 kilometres of track.
“There’s no way around it, we’re going in the right direction, but we’re also going in a bit of a different direction,” said Dickson.
He’s concerned that while freight rail infrastructure is being built, the infrastructure to transport it is not, meaning there will be some gaps.
For example, Dickson says Canada’s existing rail lines are not sufficient to accommodate the increased freight traffic.
“Canada is not ready for a railway of this size,” he said.
Dison says Canada needs to create a new model to transport freight in the future, one that can be profitable and that is also accessible for low- and middle-income Canadians.
The report notes that for example, there are more than 80,000 Canadian residents living in urban centres, and it’s estimated that the country is missing out on a third of its total gross domestic product.
The report also highlights that the current Canadian rail network is not the most reliable, and notes that in 2019, about half of all freight trains on Canadian rail lines were at least partially damaged during their journey.
That’s a number that is likely to rise over the course of the next ten years.
Dynamics of freight train travel are also being addressed by the federal government.
The federal government is spending $8.8 billion to build a new rail line between Winnipeg and Toronto.
It will also increase the capacity of some of Canada’s largest freight carriers, like Air Canada and CN, to handle the increased volumes.
The federal government has also launched the Canada-Europe Transport Hub, which aims to increase freight capacity by 2,500 tonnes annually and improve the frequency and reliability of train services.
But there is a catch: the new hub is expected to be built in 2019 and the existing ones will not be able to take advantage of this capacity until 2027.
The study also notes that the number of rail vehicles per passenger is increasing in the country.
In 2020, about 40,000 vehicles were travelling on Canadian passenger rail, up from about 35,000 in 2019.
But the increase in rail vehicle traffic is slowing down as the population ages, meaning the number is expected rise to about 100,000 by 2026.
The industry is also looking to move away from heavy, long-haul freight and toward more light-duty passenger rail.
Dickson predicts that by 2030, more than 90% of the freight on Canadian freight lines will be light- or medium-duty.
This will mean more capacity for trains to move goods from one location to another, which will also allow for better service and better customer service.