CP Rail's crude transport volumes continue to nose dive
CP Rail reported lower than expected third quarter results this week on a delayed grain harvest and plummeting crude oil volumes.
Q3 crude transport revenues fell 88% from the same time last year to just $13 million. The company transported only 5,000 oil tankers this past quarter, down from 7,000 in the last quarter and down from 25,000 in Q3/2015.
Lower crude-by-rail transport volumes were blamed on low oil prices, increased pipeline capacity and lower surcharge revenues. CP also reported a significant reduction in traffic from Alberta to the northeastern US. Year to date, crude-by-rail revenues are down 63%.
The National Energy Board has also reported falling crude-by-rail exports to the US, down to just 53,000 bbl/day in July. The Fort McMurray wildfires affected transport volumes for the spring and early summer, but rail volumes have yet to show signs of meaningful recovery.
Overall third quarter revenues at CP fell 9% to $1.55 billion over the same time last year. Despite the decline in revenues, profits rose to $347 million (versus $323 million in Q3/2015) thanks to a 6.2% cut in operating costs.