Keith Creel, the President and CEO of Canadian Pacific, shares his journey of transforming one of the largest Class 1 rail systems in North America.
He discusses the significance of railroads, the future of freight transport, and the recent merger that created the first freight rail network linking Canada, the U.S., and Mexico.
Eventually in time, change occurs. We all have to get comfortable with the uncomfortable. I think it’s inevitable. – Keith Creel
The Inevitability of Driverless Trucks
The freight transport industry is likely to witness the advent of driverless trucks, despite societal challenges.
This development could complement the railroad industry, but it also necessitates innovation and efficiency improvements within the rail industry.
Leadership Insights
Leadership involves picking the right people, creating the right culture, and delivering results.
Setting high standards, understanding the business in detail, and pushing the team to achieve more than they think is possible are key.
It’s also important to serve a bigger cause and not just oneself.
Managing Volume Variants
The rail industry faces challenges in managing volume variants.
While some customers can provide accurate forecasting, others have ebbs and flows in their production.
The company has to size their network based on averages and maintain some surge capacity to handle these fluctuations.
Coordination with Ports
Coordinating with ports, often owned by governments, is crucial to match the capacity of the rail network.
It’s pointless to create a lot of capacity in the middle if the bookends (ports) can’t handle it.
This requires investment and coordination between the rail, the customer, and the government.
The Backbone of Economy
Railroads are a critical component of the economy, facilitating the transportation of goods across vast distances.
Their efficiency surpasses that of trucks, especially for large-scale freight transport, making them a vital part of the supply chain.
The Concept of Precision Scheduled Railroading
Precision Scheduled Railroading (PSR) involves running fewer but longer trains, requiring matching infrastructure.
PSR has allowed the railway to run more efficiently, reducing the number of locomotives in service and thus reducing capital expenses.
Building Trust with Customers
Establishing trust with customers and creating a superior product that allows them to de-risk their total business mix is key in the rail industry.
Reliable service is not just about speed, but about fulfilling commitments and being a reliable service provider.
I think they misunderstand or they lack an understanding that if the rails don’t run, the products that we all enjoy, consume, and establish or define our quality of life just doesn’t happen. – Keith Creel
Impact of the Recent Merger
The recent merger that created the first freight rail network linking Canada, the U.S., and Mexico is expected to create a lot of capacity and optimize investments.
However, this requires coordination between governments and customers, as well as investment in infrastructure.
Evolving Rail Network
The rail network is evolving in response to onshoring or reshoring of certain capacities.
This trend is expected to accelerate in the future, emphasizing the importance of supply chains.
Partnership between government, customers, and the industry is needed to optimize investments and best practices.
The Role of Potash
Potash, a nutrient exported worldwide, particularly from Canada, is significant in the rail industry.
More Tidewater is needed for export, which requires investment and coordination between the rail, the customer, and the government.
System of Execution at Canadian Pacific
At Canadian Pacific, the system of execution involves matching capacity and not over-subscribing their network.
A team assesses marketing opportunities and ensures they have the capacity before selling the product.
This approach has allowed them to grow and outperform the industry efficiently.
Striking a Balance
In business, striking a balance between efficiency and resilience is crucial.
This principle applies to capacity management in the rail industry, where over-subscription of the network can risk causing it to melt down.
