July 6, 2009 - Calgary, Alberta - Canadian Pacific Railway Limited (TSX/NYSE: CP) today announced the results of rate proceedings between CP and Teck Coal Ltd. (Teck) addressing rate levels for export traffic moving between Teck's southern BC mines and Vancouver area ports. Contract terms are confidential and expire on April 7, 2010.
As part of the rate process, Teck also secured a rate for routing some of the existing export coal traffic via an interchange with another railway at Kamloops, BC. Traffic moving over the Kamloops interchange will not exceed 3.5 million metric tons between now and March 1, 2010. For CP this represents approximately 15% of historic annual total Teck coal shipping volumes.
For the total book of business with Teck, CP expects to move 17.5 to 19.5 million metric tons based on the latest publicly-available data from Teck. At the top of the volume range and at today's fuel prices, revenues would be approximately $360M for the period April 8, 2009 to April 7, 2010.
"The new arrangements will trigger changes in our operation," said Kathryn McQuade, CP Executive Vice President and CFO. "We will adjust our model, cost structure, and associated resources accordingly and continue to pursue all efforts to ensure this is the most cost effective move possible and that we maintain an efficient supply chain."
About Canadian Pacific
Canadian Pacific, through the ingenuity of its employees located across Canada and in the United States, remains committed to being the safest, most fluid railway in North America. Our people are the key to delivering innovative transportation solutions to our customers and to ensuring the safe operation of our trains through the more than 900 communities where we operate. Canadian Pacific is proud to be the official rail freight services provider for the Vancouver 2010 Olympic and Paralympic Winter Games.
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