Canadian Pacific Railway has shut a key cross-border track for up to 10 days because of flooding in Saskatchewan and North Dakota, dashing its hopes of putting a recent deluge of bad weather behind it.
The company said Thursday the rapidly rising Souris River forced the shutdown on Monday night of a line running between southern Saskatchewan and the U.S. Midwest, one of three heavily used CP freight arteries into the United States.
The news comes a week after CP, Canada’s second biggest railway, said this year’s spate of service disruptions due to heavy snow and then flooding looked to be over, and that it was working to earn back customer confidence.
“Just when much of the investment community and CP thought we were seeing greener pastures ahead, we have more challenges,” said Raymond James analyst Steve Hansen.
“It’s not anything that CP’s doing wrong per se. It’s just really a matter of Mother Nature hitting hard where CP has its tracks located,” he said.
CP’s shares are down 10 per cent this year, in part because of a bigger-than-expected two-thirds slump in profit in the first quarter when avalanches and heavy snow in Western Canada forced it to close tracks.
As winter turned to spring, flooding along Manitoba’s Red River in April compelled the railroad to close tracks in that province and reroute trains.
In this week’s closure, caused by heavy rains in southern Saskatchewan, CP is re-routing traffic east through Winnipeg on its own tracks south to Glenwood, Minn., about 200 km northwest of Minneapolis, company spokesman Mike LoVecchio said.
Delays for shippers were less than 24 hours, he said.
“We were able to evacuate all rail traffic so there are no stranded shipments,” LoVecchio said of the track that handles all types of freight, including grain, coal, intermodal and merchandise shipments.
CP would normally use other companies’ tracks in the flood-hit area, but they are also being affected by high water levels, LoVecchio said.
Flooding at Minot, N.D. has disrupted U.S. carrier BNSF Railway Co., whose line linking Chicago and Seattle runs through the northern part of the state, carrying BNSF freight and Amtrak’s Empire Builder passenger train.
BNSF said in a note to freight customers earlier in the week that the line could be out of operation for two weeks or longer. The railway, owned by Warren Buffett’s Berkshire Hathaway, said it was attempting to reroute traffic, but customers could expect significant delays.
The rapidly rising Souris River poured over flood defenses in Minot, overwhelming efforts hold back the water and forcing the immediate evacuation of thousands of homes.
Small bits of track have been washed away in Saskatchewan but CP wouldn’t be able to tally or repair the damage until the water receded, LoVecchio said.
Canadian National Railway (CN), CP’s bigger rival, has been relatively unscathed by inclement weather this year as its tracks mostly skirt the regions hardest hit by snow or flooding. CN’s stock is up 13 per cent this year.
— Additional reporting for Reuters by Allan Dowd.