The head of the newly-formed Canadian Pacific Kansas City railroad isn’t concerned about rivals’ plans to start a competing intermodal service connecting the U.S. and Mexico, asserting CPKC will offer “a much superior service.”
“We’re ready to compete,” CPKC President and CEO Keith Creel said during Canadian Pacific’s final earnings call as a standalone company last Wednesday.
The comments came just days after Union Pacific, Canadian National and Ferromex owner Grupo México Transportes announced they would leverage parts of their networks to create a cross-border intermodal service competitive with CPKC. The Falcon Premium service will offer shippers the shortest route from Chicago to Mexico.
In comments to investors, Creel said that a shorter route does not necessarily mean faster service. Despite operating a route that is 194 miles longer, CPKC is able to deliver goods from Chicago to the Monterrey, Mexico, area nearly two days faster than Falcon Premium’s advertised delivery time.
CPKC will also operate a shorter and faster route into the Mexico City area, Creel said.
“We're about to launch a train service that's unparalleled in this industry,” said Creel. “And those that partner with us are going to be winners in this game of service reliability.”
Canadian Pacific and Kansas City Southern combined into CPKC in mid-April, creating the first single-line railroad linking the U.S., Mexico and Canada. Since then, the railroad’s racked up agreements with major trucking carriers including Schneider and Knight-Swift.
CPKC will launch a daily train service from Chicago to Mexico on May 11, which is expected to handle Schneider and Knight-Swift freight. Both trucking companies will move traffic away from Union Pacific.
Schneider President and CEO Mark Rourke said in an earnings call last Thursday that the amount of traffic the carrier is planning to shift to CPKC is “a relatively small portion of our total agreement” with Union Pacific. However, executives also noted that CPKC offers an attractive network that makes it easier to transport goods from Mexico.
“What the CPKC has created is a single rail delivery going from our three ramps in Mexico directly up to the Midwest, as well as the opportunity to improve the service level with the former KCS,” James Filter, Schneider executive vice president and group president of transportation and logistics, said on the call.
