U.S. floods add to Canadian Pacific Rail's woes
Thu Jun 23, 2011 2:25pm EDT
* CP's Saskatchewan-North Dakota line shut down on Monday
* Shipments being rerouted; delays less than 24 hours
* Harsh winter contributed to 67 pct drop in CP Q1 profit
* BNSF operations also disrupted
VANCOUVER, June 23 (Reuters) – Canadian Pacific Railway (CP.TO) has shut a key cross-border freight track for up to 10 days because of flooding in North Dakota, dashing its hopes of putting recent severe weather woes behind it.
The company said on Thursday the rapidly rising Souris River forced the shutdown on Monday night of its line running between southern Saskatchewan and the U.S. Midwest, one of three heavily used CP freight arteries into the United States.
CP, Canada's second biggest rail operator, is rerouting traffic through Winnipeg, Manitoba, on its tracks to Glenwood, Minnesota, company spokesman Mike LoVecchio said.
Delays for customers were less than 24 hours, he said. The track is used for shipping all types of freight, including grain, coal, intermodal and merchandise shipments.
"We were able to evacuate all rail traffic so there are no stranded shipments," LoVecchio said.
The flooding, caused by heavy rains, is the latest weather headache to hit CP, whose first-quarter profit tumbled 67 percent because of harsh winter weather, including avalanches in Western Canada and heavy snow. [ID:nL3E7FL2GQ]
Just last week, CP executives told investors that its weather problems looked to be behind it and that the railroad was working to earn back customer confidence lost because of the service disruptions. [ID:nN13136057]
CP would normally use other railroad company tracks in the flood-hit area, but they are also being affected by the flooding, LoVecchio said.
Flooding in Minot, North Dakota, has disrupted U.S.-carrier BNSF Railway Co, whose line linking Chicago and Seattle runs through the northern part of the state, carrying freight and Amtrak's Empire Builder passenger train.
One of BNSF's mainline tracks through Minot was closed because of the high water, and the other was expected to be shut down later on Thursday, a BNSF spokeswoman said.
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. BNSF, owned by Warren Buffett's Berkshire Hathaway Inc (BRKa.N), said it was attempting to reroute traffic, but that customers could expect significant delays.
The rapidly rising Souris River poured over flood defenses in Minot on Wednesday, overwhelming efforts to delay the deluge and forcing the immediate evacuation of thousands of homes. [ID:nN1E75L0RW]
CP's stock was down 22 Canadian cents, or 0.4 percent, at C$58.08 on the Toronto Stock Exchange on Thursday afternoon. Its stock is down 11 percent in the last six months compared with an 11 percent rise in the shares of Canadian National Railway Co (CNR.TO), its biggest domestic rival.
($1=$0.98 Canadian) (Reporting by Nicole Mordant and Allan Dowd; editing by Peter Galloway)