Good morning, Mr. Chairman.
I'd like to thank you for the opportunity to discuss rail safety and safety management systems today. In the interest of time, I cannot get into all the elements of rail safety, especially the regulatory regime. However, I do understand you'll be hearing from additional witnesses specifically on the robust regulatory regime in place in Canada including the Railway Safety Act and safety management systems.
CP operates a 22,000-kilometre network through Canada and the United States. In 2013, we moved over 2.6-million carloads of traffic, with each car moving an average of 1,400 kilometres. Approximately two-thirds of that traffic moves to or from a port. The border gateway is part of Canada's global trade.
The Canadian railway industry is one of the safest in the world. CP recognizes that the best way to provide effective service to our customers and to execute our part in the supply chain is to operate as safely as possible.
I'm proud to say that CP is the safest railway in North America. We've achieved the lowest frequency of train accidents in the railway industry in each of the last eight years. In 2013 that equated to 1.8 Federal Railroad Administration reportable train accidents for every million train miles we operated.
A train accident was reportable in 2013 under FRA standards when the damage exceeded $10,000 U.S. With the locomotives costing approximately $2.5 million and the amount of heavy steel in motion we have in our business, you can imagine it's not very hard to have damages that exceed that amount. Yet we only did that 1.8 times for every million miles of train operations in 2013.
We achieved these high standards for safety through a combination of people, process, technology, and investment. The two areas I'll speak to today will focus on people and technology.
Our journey is not yet complete, but the continuous improvement in safety is evident as we better and better understand how to monitor, predict, and prevent where we could previously only search and react.
If we look at the statistics, and we do that a lot on this railroad, we see that the incidents caused by equipment and track failures are trending down. In fact, in 2012 Canadian railroads had the safest year on record. A big part of the reason for a reduction in the number of incidents caused by equipment failures is that we continue to improve our assets. This year we'll spend between $1.2 billion and $1.4 billion to improve our railroad, especially the track we operate over. In deciding where to invest, we look at the most critical areas.
Another piece of this is technology on the railroad. We now have hundreds of wayside inspection systems which look in an automated manner at the status of equipment, such as bearings, wheels, and track. These technologies are in various stages of development. Some are proven and implemented, while others are still in development.
These technologies are fundamentally changing the way we inspect infrastructure and equipment by enabling proactive identification of emerging problems. This allows the railroad to focus repair efforts on problem areas before they present risks at the operation. We'll continue to invest in safety enhancing technologies as we move forward.
Every incident at CP is taken very seriously. I personally review in detail all incident reports on a daily basis. We push very hard when it comes to rules compliance. We set expectations for people who are leaders on the ground and expect those to be met.
Training is also very important not only for current but also future railroaders. We invest significantly in training, coaching, recognition, and obtaining employee input to strengthen our safety culture. At a corporate level, we're committed but we're also focused most specifically on manager and employee accountability.
My job is to set the expectation to provide the tools, including training, so people know what's expected. I've said many, many times that no job on our railroad will ever be so important that we can't take time to do it safely. Safety enables performance.
I want every man and woman who comes to work every day to operate in a manner that puts safety first and foremost. People's lives are at risk. That must be at top of mind every day, every hour, every minute we're on the property.
Where we're seeing, however, a stubborn flat line of statistics is in an area called human factors. These are incidences essentially caused by human error. This is one area we need to focus on going forward. That's why we want to add cameras and recording devices in locomotives.
Today there's a convergence of onboard locomotive technologies occurring whereby a number of information technologies can be linked, including outward-facing cameras, locomotive cab digital recording, and various detection systems. Identifying these human factors is critical to understanding why accidents occur before they occur.
When companies cannot use voice and video recordings proactively, they're deprived of opportunities to reduce risk and improve safety, as I've said, before an accident occurs. I urge you to consider recommending changes to the statutory provisions to fully allow deployment of this technology. In my view, this is the most important step that can be taken at the immediate time to further improve safety.
In terms of the movement of dangerous goods, railroads in Canada, in North America for that matter, have what is called a common carrier obligation. That means if a shipment is presented to the railroad, we have to move it. It's the law. The customer can also instruct us on how they'd like their product moved.
The fact is, do we want to be moving some of these products? Probably not, but it's the only way some of these products would get moved. Our problem is each time we move these products, we take a significant risk that could have tragic consequences not only for the public but also for the railroad.
Producers of some products would argue that these products need to be made. They would submit that they drive the economy, sanitize your water, and that they are not highly substitutable. I can buy that to some degree, but not completely. That is why we are looking for some changes in government policy to ensure that the regime deals with the risks and liability in a manner that is in the broad public interest.
There is also urgency about the need for safer tank cars to move these dangerous goods. We at CP have been very vocal about this for some time.
The vast majority of railcars that carry crude and other hazardous materials are single-walled cars known as DOT-111 cars. l'm not happy with these cars for moving dangerous goods. In fact, I'm not happy at all.
There is a process that has been started in the United States, which Canada is also involved in, looking at the new tank car standards and how to phase out the older ones. I look forward to the outcome from this process that sees more new cars coming online sooner versus later.
If we can get everyone working together, adopting a higher level of safety and accountability, we are going to be able to reassure our neighbours and the communities we operate in and through that they can sleep at night.
A lot of you see trains going through your towns and you're concerned. I get that. Those pictures from Lac-Mégantic caused sleepless nights for all of us.
I would like to reaffirm to you that we do operate safely. We continue to improve our safety performance. CP is the leader in North American rail safety, and that is something I am not only very proud of, but continue to be focused on every day.
Thank you, Mr. Chairman.