John D. Boyd | Jul 22, 2009 1:37PM EDT
At a time when normal rail freight traffic has plunged, Canadian National Railway is revving up its jet fuel hauls at Toronto’s Lester B. Pearson International Airport.
That traffic has grown so much in recent years that customers opened a $59 million facility by the airport to offload rail tank cars, so they can put the fuel into storage tanks and pipes there to distribute it to the airlines.
“We've developed a substantial business at Pearson – one that didn't exist a half-decade ago – and we see potential for future jet fuel traffic moves in Vancouver, Calgary and Winnipeg,” said James Foote, CN’s executive vice-president for sales and marketing.
The railroad brings the fuel in from facilities either at the port in Quebec City, or from Toledo, Ohio, by way of a CN transload terminal in Flat Rock, Mich.
CN said this business began six years ago when Air Canada began sourcing jet fuel for use at Pearson by rail from an import terminal near Quebec City.
Until recently, the fuel came into CN's main classification yard in northern Toronto and was trucked to the airport. CN spokesman Mark Hallman said each tank car generated two truckloads, and previous volume put 24 to 28 trucks a day on area roads.
Paul Whitty, the airline’s director of fuel purchasing and supply, said “our partnership with CN has enabled Air Canada to improve the economics of its fuel purchases. This is extremely important to us in a challenging environment for airlines.”
Over time, so much fuel was coming into Pearson by rail, with more expected, that customers opted for an on-airport terminal. No CN money went to build that facility.
FSM Management Group of Dorval, Que., runs the terminal for the 33-airline member Toronto Fuel Committee. That group leases it from Pearson International Fuel Facilities, which owns all fuel structures and equipment at Pearson, including storage tanks, operation buildings and offices, hydrant carts and fuel tankers.
FSM President James Fee said his firm expects to transfer 775 million liters of jet fuel to the terminal from tank cars this year, for nearly 40 percent of Pearson's total annual fuel use.
That estimate is based on an average of 20 tank cars per day, suggesting the new terminal will handle a larger volume than the railroad shipped before.
Fee also said the terminal’s track and siding infrastructure allows 26 tank cars to be unloaded at once on two tracks. But more track is being built in the current quarter to add another 20 car spots for unloading.
Contact John D. Boyd at jboyd@joc.com.
