Canadian Pacific Railway says years of downsizing and layoffs are in the past as it focuses on growing the company, in part to handle the Chinese market’s huge shipping demands for both imports and exports.

“`I would say that we are coming to an end of that ability to achieve efficiencies through workforce reductions,’’ CPR chief executive Rob Ritchie said last week after the railway’s annual shareholders meeting in Calgary.

“So we’re going to obviously have to be growing the company going forward as the tonnages improve.’’ In the past five years, CP Rail has reduced its workforce by more than 16 per cent, from 19,200 employees in 1999 to about 16,100 last year.

And the railway, Canada’s second-largest behind Montreal-based Canadian National Railway, is still in the midst of cutting 820 jobs as part of a three-year plan announced last June.

Larry MacDougal photo, Business Edge
CEO Robert Ritchie says Chinese imports and exports plus more grain shipping are boosting rail tonnage.

“We started in 2003, adding crews and operating personnel, but we’re still adjusting the workforce on the administrative side,’’ Ritchie said.

Although the company does not unveil its first-quarter results until this week, executive vice-president Fred Green said the volume of containers the company is moving through Vancouver has “grown dramatically,’’ due to the burgeoning Chinese economy.

“Just in orders of magnitude, the Chinese export community is becoming a phenomenal source of goods,’’ Green said.

Meanwhile, CP Rail is enjoying growth in many of its bulk segments including coal, sulphur and potash as well as a rebound of grain shipments after years of drought in Western Canada.

Ritchie told shareholders that the sharp growth in both imports and exports for the Chinese market were unplanned for by everyone in the transportation supply chain. He said CP expects to have a better idea by mid-year whether it needs to expand its infrastructure to handle the increased demand.

“This company has seen these surges before and we will undoubtedly see them again,’’ Ritchie said.

“This time we need to assure ourselves of the long-term sustainability of the demand . . . and we need to know before we commit heavily to major infrastructure investment.’’ CP Rail is expecting double-digit tonnage growth for its western corridor between Vancouver and Moose Jaw, Sask., and high single-digit growth for its north-south route from Edmonton to Minneapolis.

But on the cost side, the railroad still faces challenges of persistently high fuel prices, higher insurance costs and pension plan funding difficulties with currently low interest rates.

Ritchie also said the company is “still grappling’’ with what to do with its financially troublesome Delaware & Hudson railway in the northeastern U.S. and should have a better idea in the next several months.

Last year, the company said it planned to restructure the Delaware & Hudson but wasn’t keen on selling the line, which provides a valuable footprint in the densely populated eastern seaboard region of the United States.