Canadian Railroads > CP wins back Yang Ming, will dominate Deltaport

CP announced on May 31,
that they have won back all of Yang Ming's ocean container business at Vancouver,
starting on January 1, 2020, with a three year contract.
As a result, CP will handle a majority of containers landing at Deltaport, near Vancouver.

CP lost Yang Ming three years ago,
and had only a weak minority of Deltaport container traffic.

As a result, CP has sewn up the business of "THE Alliance",
consisting of Ocean Network Express (ONE), Hapag-Lloyd, and Yang Ming.
CP has handled Hapag-Lloyd for years.
CP won 85 percent of Ocean Network Express business in 2018.
CP will again handle Yang Ming starting in 2020.

Some railroad media have reported
that CP has won all of Yang Ming's Canadian business.
Not sure about that, as it was announced in 2018, that Yang Ming would begin service to Prince Rupert,
served exclusively by CN.

CP news release
https://www.cpr.ca/en/media/cp-and-yang-ming-sign-long-term-agreement-to-connect-yang-mings-customers-with-north-american-markets

Not sure about this headline
https://www.progressiverailroading.com/canadian_pacific/news/CP-to-serve-as-Yang-Mings-Canadian-rail-carrier--57692
Prince Rupert 2018 announcement
https://www.globenewswire.com/news-release/2018/04/20/1483528/0/en/Yang-Ming-THE-Alliance-Introduce-Weekly-PS8-Prince-Rupert-Service.html



Edited 8 time(s). Last edit at 05/31/19 09:21 by Marcus.

Better service, or better cost, I wonder.

Posted from Android

Lackawanna484 Wrote:
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> Better service, or better cost, I wonder.
>
> Posted from Android

Usually a combination of both depending upon the value of product in each container (toys vs electronics for example) and needed speed of delivery. In many of these contracts the RR makes the most money the final 1 or 2 years of the said contract.

Allen

I've seen ONE containers popping up on 198/199 from Vancouver to Chicago. I always wonder if CP will ever get above one intermodal a day in that market, considering if I wander over to the CN mainline in Illinois it seems like they have 3-4 stack trains each way a day from Canada to Chicago and beyond. Someone might be more accurate on that number but it is certainly several, while CP is certainly just 1.

bradleymckay Wrote:
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> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
> > Better service, or better cost, I wonder.
> >
> > Posted from Android
>
> Usually a combination of both depending upon the
> value of product in each container (toys vs
> electronics for example) and needed speed of
> delivery.

Except for new product launches, both toys and electronics are unlikely occupants of marine boxes going inland. That kind of stuff is moe commonly trans-loaded in order to better manage the geographical distribution of inventory.

The marine boxes going inland on regular all-marine-box stack trains are largely loaded with cheap stuff, e.g., furniture, plastic goods, rubber goods, building materials, etc.

RR service on such marine stack trains is basically a commodity, and the contract goes to the lowest bidder providing an adequate service network.

In the case of Yang Ming, I suspect CN tried to raise the low rates they offered through Prince Rupert and CP via Deltapot was able to undercut CN's bid.

Best regards,

Rob L.

rob_l Wrote:
-------------------------------------------------------
> bradleymckay Wrote:
> --------------------------------------------------
> -----
> > Lackawanna484 Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > Better service, or better cost, I wonder.
> > >
> > > Posted from Android
> >
> > Usually a combination of both depending upon
> the
> > value of product in each container (toys vs
> > electronics for example) and needed speed of
> > delivery.
>
> Except for new product launches, both toys and
> electronics are unlikely occupants of marine boxes
> going inland. That kind of stuff is moe commonly
> trans-loaded in order to better manage the
> geographical distribution of inventory.
>
> The marine boxes going inland on regular
> all-marine-box stack trains are largely loaded
> with cheap stuff, e.g., furniture, plastic goods,
> rubber goods, building materials, etc.
>
> RR service on such marine stack trains is
> basically a commodity, and the contract goes to
> the lowest bidder providing an adequate service
> network.
>
> In the case of Yang Ming, I suspect CN tried to
> raise the low rates they offered through Prince
> Rupert and CP via Deltapot was able to undercut
> CN's bid.
>
> Best regards,
>
> Rob L.

It probably also helped CP's cause that CN is now in a seemingly constant state of melt down.

It is also interesting that CP under Hunter Harrison attempted to eliminate low profit business like marine container contracts, but now, it appears they are back to embracing that low rate business again...

Is the Canadian marine box business a two way loads business? Or is this loads in, empties out?

Posted from Android

as far as c.p. operations go, does anybody know if this will mean more OR longer c.p. trains?

66

spwolfmtn Wrote:

> It is also interesting that CP under Hunter
> Harrison attempted to eliminate low profit
> business like marine container contracts, but now,
> it appears they are back to embracing that low
> rate business again...

Creel's line is that with CP having driven down its costs to rock bottom, such low-margin business is now profitable. That's what he has said at the investors' presentations.

Lackawanna484 Wrote:
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> Is the Canadian marine box business a two way
> loads business? Or is this loads in, empties out?

There seems to have been a lot of "manufactured goods loads" and "materials from the recycling bin loads" out, but various Pacific Rim countries are now having second thoughts about accepting this Canadian "product."

Ray 

Thanks

Posted from Android

Lackawanna484 Wrote:
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> Is the Canadian marine box business a two way
> loads business? Or is this loads in, empties out?
>
> Posted from Android

Back in the mid 1990's I worked in equipment control for OOCL in Vancouver.  At that time the import loads from Asia were always far greater than the export loads from Canada, so every single inland port had far more empty containers than we could ever hope to fill.  Instead of paying to ship all these empty containers back to Vancouver, OOCL had a domestic repositioning deal with CN.  They could use a specified number of our containers for domestic traffic, provided they return the empty back to the Port of Vancouver within a certain time frame.  I believe it was a 30 day deal, but it could have been longer.  Regardless, it was a win-win situation for both OOCL and CN.  They got free equipment and we got free repositioning back to Vanterm.  I don't know for sure, but I doubt this deal was unique to OOCL.  As for today, I have no idea if these kind of deals still exist.

Dwayne  

Good info, thanks.

I wonder if these marine containers could be used for specific crops of organic millet, the etc. That is often bagged.

Posted from Android

Lackawanna484 Wrote:
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> I wonder if these marine containers could be used
> for specific crops of organic millet, the etc.
> That is often bagged.

Many marine containers are used for export of grain products to Asia.  20' marine boxes are most commonly used for this.

BoostedFridge Wrote:
-------------------------------------------------------
> Lackawanna484 Wrote:
> --------------------------------------------------
> -----
>
> > I wonder if these marine containers could be
> used
> > for specific crops of organic millet, the etc.
> > That is often bagged.
>
> Many marine containers are used for export of
> grain products to Asia.  20' marine boxes are
> most commonly used for this.

Thanks

Posted from Android

Does CP have the infrastructure to handle the additional business or will new sidings etc. have to be lengthened or constructed?  How much of this freight is destined for U.S. markets?  If bound for the U.S., will Bensenville be the terminal in Chicago to handle such freight?  Will some of the containers be land bridge and end up at the Ports of Montreal or Albany, N.Y.?

From a draymans perspective, CP Bensonville is one of the worst ramps in the Chicago area to get in or out of.  Small, congested, and long lines to get containers lifted onto chassis.