WASHINGTON — Canadian Pacific Kansas City CEO Keith Creel says his railway is making its own luck at a time when trade tensions, economic uncertainty, and plenty of truck capacity are roadblocks to volume growth.
“We create solutions instead of excuses,” Creel told an investor conference on Wednesday.
Among them:
- Boosting traffic between Canada and Mexico as tariffs make U.S. markets less attractive.
- Offering new service, like the Americold temperature-controlled intermodal moves linking Mexico, the Midwest, and points in Canada.
- Developing interline intermodal service with CSX that connects Mexico and Texas with points in the Southeast.
- Capitalizing on single-line, cross-border service to and from Mexico.
“We’ve made our own luck in connecting new markets,” Creel says. “We’ve continued to enjoy growth in the industry, which is unique in this macro environment. It’s been enabled by this new network.”
For the quarter to date, CPKC’s revenue ton-miles are up 2.2%. Measured by carloads and containers, however, volume is down 1.7%, which is partly a reflection of tough comparisons to the first quarter of 2025, when shippers rushed to beat looming U.S. tariffs.
Creel says trade disagreements between the U.S. and Mexico and Canada will get ironed out, likely with Mexico first.
“I think the relationship between President Trump … and Mexico is healthy and strong, and I see a path to resolution,” Creel says. “At the end of the day, they want a good relationship. They understand the U.S. has concerns. President Trump is very clear in what they are, and I think they came prepared to make a deal.”
Foreign investment in new and expanded manufacturing plants in Mexico has been sitting on the sidelines awaiting resolution of trade disputes. Creel says a renegotiated trade deal with Mexico will provide the certainty necessary for companies to uncork funding for new facilities.
In the meantime, CPKC’s focus on bridging Mexico-Canada trade through the U.S. is bearing fruit. In 2024, traffic between Mexico and Canada “was maybe 2% of our revenue,” Creel says. “Now we’re north of 3%. It’s almost a half-billion dollars … of new incremental revenue. And we see another $100 million this year. So again, this unique network has enabled that.”
CPKC is handling more shipments of French fries, grain, and petroleum products between the two countries.
Next month CPKC and CSX will launch a dedicated intermodal train using their new interchange in Myrtlewood, Ala., on the former Meridian & Bigbee short line.
“We bought a railroad that was essentially a 10-mph railroad,” Creel says of the deal to acquire the route from Genesee & Wyoming. CPKC and CSX are putting the finishing touches on track upgrades that will permit 49-mph operation over the line, which stretches from Meridian, Miss., to the outskirts of Montgomery, Ala.
“We now have an infrastructure that will take you from Atlanta essentially all the way to Monterrey in three days and then middle Mexico in four days,” Creel says. He compares the Southeast Mexico Express (SMX) service to the railway’s Midwest Mexico Express trains 180/181, which have grown substantially since CPKC launched the service between Chicago and points in Mexico right after the CP-KCS merger.
Creel says he and CSX CEO Steve Angel are committed to the new service.
“I met with Steve at CSX a couple of weeks ago, and I explained to him our journey on 180/181. And I said, Steve, listen. Your team’s going to come to you and say this isn’t a trainload length train. And listen, we’re all sensitive to cost, but sometimes you have to build it. You’ve got to put it in the marketplace. You’ve got to make the upfront investment and grow it.”
Once the railroads prove the reliability of the SMX service, Creel says customers like Amazon, auto-parts suppliers, and service-sensitive truckload customers will jump on board and fill out the train. Schneider is the train’s anchor customer.
CPKC is about 40% toward its merger-related goal of taking 64,000 truckloads off the highway annually. Creel says the slower-than-expected pace is due to excess truck capacity, low trucking rates, and the time it takes to roll out new initiatives like the Americold cold storage warehouse that opened this year at the railway’s intermodal terminal in Kansas City, along with companion facilities in Mexico and Saint John, New Brunswick.
The difficulty in reaching the truck conversion goal is among the reasons Creel says he’s skeptical of the 2 million truckload gain that Union Pacific and Norfolk Southern are projecting their proposed merger will bring.
“This … does not happen overnight and certainly not in a three-year period,” Creel says of converting over the road freight to intermodal. “So I’m not saying it can’t be done. I’m going to take [UP CEO Jim Vena’s] word. I think it’s a high aspirational target, and I think it’s a lot more complicated.”
Creel spoke at the J.P. Morgan Industrials Conference.
— To report news or errors, contact trainsnewswire@firecrown.com.
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