- Better operations at one railroad is good for all railroads, and the work of several U.S. railroads to convert to precision-scheduled railroading (PSR) is already showing marginal improvement to overall flow, said Canadian Pacific Railway CEO Keith Creel on the first-quarter earnings call Tuesday. CSX, Kansas City Southern, Norfolk Southern and Union Pacific are all at various stages of PSR transition.
- "What I'm seeing, I'm encouraged by given I know a little bit about this," Creel said." And all railroads, the metrics are moving in the right direction. At the end of the day, when all the railroads get better, it creates capacity."
- Creel specifically called out smooth interchanges with Union Pacific in the Pacific Northwest as one example. "The throughputs since they've recovered from the very challenging drum that they had in their tunnel has exceeded my expectations. It allowed us to move quite a bit of product through that gateway," he said.
One of the major benefits of PSR is an emphasis on trip plan compliance, which measures how faithfully railroads deliver on their promised schedules and delivery times. It's often painted as a benefit to shippers, but improved reliability is also a benefit to other Class I lines, since the railroads pass off freight from hundreds of railcars per day.
Increased train velocity is also a hallmark of PSR, which can benefit shippers and railroads beyond a single network.
"I continue to be their biggest cheerleader and encourage each one of them individually and collectively to stay the course, because ultimately they're going to be able to create additional capacity for customers to enjoy, additional monies to invest back in infrastructure to grow capacity, not shrink capacity," Creel said.
In terms of CP's own evolution, Creel said the railroad still isn't using all of the capacity it created when it transitioned to the operating philosophy several years ago.
"We are in a very unique position ... where we have capacity across our network that represents meaningful opportunities to invest organically on our own physical footprint to grow revenue streams," he said.