CP Expressway being shut down...

[Overmod]

Newswire reports CP Expressway service is being shut down, but the story has not been posted for forum participants to read yet.

I'm upset this is happening considering the hard work and 'smarts' that went into the service, its operation, and its marketing.

[Miningman]

What a disappointment. Nothing about this makes sense but the world is upside down so what is sensible is not what you think. 

[Ulrich]

Good service, but I'm not surprised given the apparent lack of interest from customers. 

[PNWRMNM]

If the customers will not buy enough volume at a high enough price, technical elegance means nothing. It lasted for several years, so was a good effort.

Mac

[SD70Dude]

Services like Expressway often depend on a few anchor customers (or perhaps just one, think Walmart, Canadian Tire or UPS) to guarantee enough business to make the operation viable on a daily basis.  

Perhaps CP lost one of those key customers, just like Santa Fe's Super C and the U.S. Mail contract.

[466lex]

Drayage time, drayage expense, and terminal time (while accumulating a train full of trailers) rapidly erase the rail linehaul cost advantage vis-a-vis OTR, and worsen the rail service disadvantage.  At 350 miles, it is unlikely that even a crewless train service would be cost or service competitive.  Give CP credit for trying for 20 years, and credit for being realistic in not reinvesting.

[traisessive1]

The above is correct. 

A trailer service between Toronto and Montreal doesn't make sense. 

This is the end of TOFC on Canadian mainlines.

[AgentKid]

SD70Dude

Services like Expressway often depend on a few anchor customers (or perhaps just one, think Walmart, Canadian Tire or UPS) to guarantee enough business to make the operation viable on a daily basis.

I have read on another source that the issue was the recent bankruptcy/closure of Sears Canada.

Bruce

 

[Ulrich]

And their other biggie, Canadian Tire, appears to favor containers.   

[greyhounds]

AgentKid

 

 

 

 

I have read on another source that the issue was the recent bankruptcy/closure of Sears Canada.

Bruce

 

 

That makes sense.  It isn't as if CP just figured out the drayage and terminal costs after operating the service for 19 years.

I strongly disagree with people who make blanket claims about the miles/kilometers an intermodal service must operate in order to be profitable.  It's always situation specific.

When EHH went to the CP I thought one of the first things he'd cut would be the Expressway service.  But it ran right through his tenure.  I don't think that would have happened if the financial numbers were not good.

But the demise of a major customer, or customers, will change those numbers.

[CNSF]

Another factor might have been that the equipment is nearing the point where significant refurbishment will be required. It's been running for 20 years, after all. Expressway was only ever marginally profitable at best, and for that sort of business, you might only want to stay in the game until reinvestment is required.

[greyhounds]

CNSF

Another factor might have been that the equipment is nearing the point where significant refurbishment will be required. It's been running for 20 years, after all. Expressway was only ever marginally profitable at best, and for that sort of business, you might only want to stay in the game until reinvestment is required.

Yes, that's another possibility.  They might have faced major expenditures and came to the conclusion that it just wasn't worth it.  That meeting, with certainly raised voices, would have been interesting to attend.

But "Marginally Profitable" is "Profitable" and that means you seek it.  And railcars last for 40-50 years, not 20.  The equipment wasn't being banged around in yards.  I do not know what happened.  But I reject fully the claim that drayage costs and terminal costs, only discovered after 19 years of operation, doomed the service.  

It ran for 19 years and that's a good run in any rational person's thought.

[V.Payne]

Interestingly, CP sought a contribution toward line haul infrastructure to keep the longer original configuration to Detroit (Windsor), but was not able to get any level of government to agree to help offset the highway damage. See page 19 of this presentation link.

http://www.gateway-corridor.com/torontoworkshop/documents/presentations/Cairns_Malcolm_Toronto.pdf

Now, correct me if I am wrong, but isn't container based intermodal only offered one way (westerly) between Montreal and Toronto on a container train schedule of 39 hours for the 350 miles between cutoffs as opposed to Expressway's 14 hours overnight?

http://www.cpr.ca/en/customer-resources-site/Documents/intermodal-domestic-schedule-2018.pdf

http://www.cpr.ca/en/customer-resources/shipping-guides/expressway-operating-guidelines

 

 

 

[SD60MAC9500]

"Montreal and Toronto on a container train schedule of 39 hours for the 350 miles between cutoffs as opposed to Expressway's 14 hours overnight?"

 

 

14 hrs. If CP could've got that transit time down to 8-10 hrs. It would 've been truck competitive not as fast, but a transit time in that range would cause some curiosity to give to give expressway service a shot. Cut loading time from 90 mins to 70 mins. Road time between Toronto and Montreal will take 6-8 Hrs depending on traffic etc..

[Ulrich]

Just not enough interest from shippers as box truck rates are so low in that lane anyway, and service levels are hard to match let alone beat.

 

Maybe they should have focussed on flatbed loads.. rates are higher in that market..  flatbed rates are in the $1200.00 range verses $700 for box truck. TOFC flatbed service.. 

Regardless, competing in any business when one doesn't have a price OR a service advantage is much like beating yourself up with a broom stick.. kinda pointless.