The following information sheet was issued by Canadian Pacific in October 1978.


Inside Canadian Pacific

Competition, co-operation — or both?

It began as a railway almost 100 years ago. Today Canadian Pacífic has flourished and grown into a family of companies that together form the world’s most complete multi-modal transportation organization.

This organization which consists of four principal transport groups CP Rail, CP Ships, CP Air, and the road transport group including Smith Transport, CP Express and CP Transport has additional important — holdings in various other fields, particularly telecommunications, real estate and natural resources.

With a multiplicity of transportation services available through Canadian Pacific, it is inevitable that two questions arise: how do the various companies co-operate to help the customer, and what happens when a situation arises that places two companies in a potentially competitive position?

While Canadian Pacific began as a railway indeed, only changed its — corporate name from Canadian Pacific Railway Company to Canadian Pacific Limited in 1971 — today it accords no priority to any one mode of transport over any other.

The individual companies are grouped under the corporate umbrella according to a profit centre concept, and in many respects operate very much as if they were independent concerns. Each company has its own marketing and operating structures, with its own management responsible for profit centre results.

In organizing its operations in this manner, Canadian Pacific follows the philosophy that any business must justify its continued existence by the strength of its own performance. In other words, it must generate sufficient margin to pay its way and warrant the continued use of the resources in the business.

CP Rail is the oldest “company” in the corporate Canadian Pacific organization. Directly or indirectly, its acquisitions, requirements and the need for complementary services led to the development of many of the other companies, including CP Ships, CP Air, CP Transport, CP Express, CP Telecommunications and CP Hotels.

Virtually since its inception, Canadian Pacific has been an intermodal co-operative venture. Three weeks after the first scheduled transcontinental train arrived at the Pacific coast, Canadian Pacific’s first chartered ship from the Orient docked, carrying goods consigned to move by rail to eastern markets. Dominion Express Company, forerunner of the road transport group, was originally purchased to handle pickup and delivery service for the railway.

Today, CP Rail operates more than 17,083 (27,487 km) main track miles from coast to coast and controls another 4,622 (7,437 km) miles in the United States. Its equipment fleet includes approximately 70,000 freight cars, 3,000 pieces of service and maintenance equipment and 1,300 locomotives. As of 1979, CP Rail passenger operations were taken over by VIA Rail Canada.

Foreign freight constitutes a significant part of CP Rail’s traffic, and the railway, as a common carrier with independent interests, has developed its own marketing organization to accommodate overseas trade.

Today, CP Rail’s Overseas Trade group has offices in three of Europe’s largest centres of commerce — London, Paris and Hamburg. Offices are also maintained in Tokyo, Osaka and Hong Kong, and Melbourne, Australia.

The rapidly-expanding technology of transportation is of prime importance in improving operational efficiency and customer service.

The railway has developed sophisticated unit train systems for moving bulk commodities such as coal, potash and sulphur and has played a major role in increasing container traffic throughout Canada.

If CP Ships began its existence in the last century as a satellite service of CP Rail, it certainly does not fit that description today.

Three 16,000 dwt. 20-knot container ships, built at a total cost of $20 million in 1971, provide weekly door-to-door service between North America, Britain and continental Europe. CP Ships’ Racine Terminal in Montreal is designed to permit an annual throughput of more than 100,000 containers.

CP Ships has offices throughout Canada and the U.S., also offices in England, Germany, France, Holland and Belgium and sales agents throughout Europe.

In addition, Canadian Pacific (Bermuda) Limited was incorporated in 1964 to own and charter bulk cargo vessels for international trade. Its fleet now numbers 29 vessels from 250,000-ton very large crude carriers down to 28,000-ton geared bulk carriers.

CP Air links five continents and major cities across Canada with more than 64,038 (91,000 km) unduplicated route miles. Internationally, it serves southern Europe, Central and South America, and the Pacific Rim. Its fleet of 24 jets is serviced by the largest and most modern operations centre in Canada, located at Vancouver.

Recently re-organized under the banner of Canadian Pacific Transport Limited, three trucking firms make Canadian Pacific Canada’s largest trucking operator, hauling freight from coast to coast with more than 6,000 units of modern road equipment.

The three firms retain their identities, and each performs a different function.

CP Express specializes in small shipments and also acts as a freight y forwarder. The company operates two automated freight terminals at Montreal and Toronto for consolidation and sorting of package shipments.

Canpar, the parcel delivery express service developed by CP Express provides fast surface delivery of parcels’ under 70 pounds to 2,400 points in Canada.

Smith Transport is active in the container field, hauls highway freight in Ontario and Quebec, and connects with other carriers, including CP Transport, to move goods anywhere in North America.

CP Transport handles express and truck freight shipments throughout western Canada and specializes in heavy and bulk haul contract movements, frequently involving the development of distribution systems tailored to the needs of specific customers.

Largely due to geography, intermodal movements have long been a common occurrence at Canadian Pacific, and corporate co-operation has been the key to success in many instances.

An inland distribution system developed by CP Rail for a major oil company demonstrates this co-operation. In earlier years, the company had delivered many of its refined bulk products from Calgary and Vancouver refineries to interior points of British Columbia by rail. Today, this is done mostly by truck.

CP Rail combined the two, providing daily long haul rail movements from the refinery to a transfer point in B.C., and then truck delivery to about 40 outlets, at a single rate for the entire movement. In this instance, the system was designed by CP Rail and CP Transport provided the local deliveries.

Through innovation and expertise in intermodal movements, CP Rail was able to capture a significant portion of the market and, at the same time, provide more efficient service to the customer.

CP Ships deliver the containers to port. CP Rail and Smith Transport both provide inland links for container movement from the terminal. lat ca ave Solid blocks of containers move by rail every day on special fast schedules from Montreal to Toronto. From the CP Rail transfer terminal at Toronto, the boxes may be moved by truck — frequently Smith Transport or CP Express — to the receiver’s dock.

In many instances, traffic gravitates naturally to one mode or another, but the advantages are not always distinct. Such is frequently the case in middle-distance land transportation.

Motor carriers frequently hold an edge over railways for short haul movements, and with the development of better roads and larger highway equipment, trucks have become highly competitive in medium or long distance movements as well.

Thus the Canadian Pacific Transport group may find itself seeking the same traffic as CP Rail. The 390-mile-long Montreal-Toronto corridor is a real) typical example.

Improvements in highway systems and the advent of larger trucks have challenged rail’s once absolute supremacy. Railways have responded by instituting “piggyback” service — trailer-on-flatcar movements that offer the long distance economy of trains, combined with the door-to-door ties convenience of truck delivery. They have thus gained a market rather than losing one.

Twice a day, large concentrations of highway trailer flat cars leave Montreal and Toronto, loaded with cargo that otherwise might have moved by highway — and quite possibly by Canadian Pacific truck, although it could belong to any truck carrier to whom the service was attractive.

Quite logically, CP Transport, Smith Transport and CP Express are among the prime users of the continent-wide intermodal services available through CP Rail.

However, most competition that exists between Canadian Pacific modes is of the “indirect” variety, and comes as a result of their independent common carrier stance.

The East Coast container distribution situation is a good illustration. CP Rail — as a common carrier — provides railway service for many container companies (through Brunterm in Saint John, N.B., and the Port of Montreal) which are in direct competition with CP Ships for United Kingdom and European traffic. By providing efficient transportation for these other shippers, CP Rail effectively becomes part of a competing organization.

In Saint John the railway is a joint owner of Brunterm Limited, the fastest growing container terminal in Eastern Canada. Brunterm provides facilities for 10 major European and Japanese shipping lines, and the indications are that container traffic through the port will continue to increase by 15 per cent a year.

Brunterm is located on a 22-acre site, provides storage capacity for approximately 6,000 containers, throughput capacity of 200,000 containers a year, a 1,350-foot lay-to berth, a 1,200-foot slip berth, and three ship-to-shore cranes each having an outreach of 115 feet and a capacity of 40 tons. Water depth at the terminal is a minimum 40 feet.

In one area of North American land transportation, railways are still relatively immune to challenge from other modes: long distance movement bulk commodities. CP Rail’s unit train systems carry millions of tons of coal, sulphur and potash each year.

Still new technologies loom on the horizon. Solids pipelines promise an economically viable alternative to rail movements for some commodities. Canadian Pacific and Shell Canada jointly own ShelPac Research and Development Limited, which was formed to conduct research and development work on ver solids pipelines projects.

Unitank Limited, established in 1976, is a bulk liquid terminal and warehousing operation at Quebec City, jointly owned by Canadian Pacific Limited and Unitank Storage Company Limited of England, a subsidiary of Tate & Lyle Limited.

It handles and stores liquids shipped in tankers, in tank trucks or rail cars, and provides the necessary connections between marine and land forms of transportation, as well as warehousing for varying lengths of time.

Unitank Limited has completed an $8-million construction program to expand and improve an existing terminal at Beauport Flats on the Quebec City waterfront. A total of 21 new tanks were added to the six already in place, to increase total storage capacity to 80,000 cubic metres of liquids shipped in tankers, tank trucks and rail cars.

Incan Ships Limited, formed in May 1972 to research and develop new marine-based intermodal distribution systems, has a rail car transporter barge operating on Lake Superior. The ship, the “Incan Superior”, is capable of carrying twenty-six 50-foot cars or thirty-two 40-foot cars, and substantially reduces the turnaround time of rail cars. Incan Ships Limited is jointly owned by Canadian Pacific Limited and Inchape & Co. of London, a British company with world-wide shipping and trading interests.

Canadian Pacific Consulting Services Limited started off in 1969 as a very small organization us employees from other sectors of Canadian Pacific, particularly the railway, on a project basis in its consulting ventures. However, the company has grown significantly in several years and has become a broadly based engineering, transportation and economic consultancy The company calls on to governments and businesses around the world. professional, technical and operating personnel in the Canadian Pacific group, to meet the specific requirements of projects anywhere in the world.

In 1977, CPCS completed the largest consulting contract in its history, covering provision of technical assistance the Indonesian Railways over a two-year period. Since its formation, the company has carried out major projects also in Canada, Australia, Malaysia, Tunisia, the Congo, Venezuela, Ghana, Togo, Panama, Zambia, Nigeria, Turkey, Egypt, Brazil, Algeria, and Thailand.

Canadian Pacific considers that it is in the transportation business and is not just a railway, a truck line, a shipping service or an airline. The company has always endeavoured to understand the impact of change on the transportation market and acted, where appropriate, to bring about the change necessary to keep it in the forefront of developing technology.

This practice, and the concept of intermodal competition, have led naturally to the profit centre policy which ensures that each mode within Canadian Pacific will seek the maximum amount of business it can acquire. Where one of its sister companies happens to be directly involved in the same kind of movement, active competition results; but where complementary activities can be more profitable and lead to better service, efforts are naturally made to achieve co-operative operations.

October, 1978


Source

A physical copy of this document is part of the Federal identity archive.