Calgary Alberta - Canadian Pacific and Kansas City Southern continue to test interline moves linking Canada, the U.S., and Mexico as a prelude to eventual single-line service once their proposed merger is approved.
 
The railroads have operated six or seven international intermodal trains from the Port of Lazaro Cardenas, on Mexico's west coast, to Chicago, CEO Keith Creel told investors and analysts on the railway's earnings call on Thursday morning.
 
The transit time from the dock at Lazaro to arrival at Bensenville Yard in Chicago was seven days, which Creel says is competitive with alternate routes from the U.S. West Coast.
 
CP and KCS also have teamed up for domestic intermodal service linking Chicago and Laredo, Texas, on the Mexican border.
 
The trains have made the run in 90 hours, which is just an hour longer than the best currently published rail schedules between Chicago and Laredo, Creel says.
 
The transit times will be reduced to 80 hours, Creel says, once CPKC boosts capacity with $275 million worth of expansion projects that will add and extend sidings on both railroads and install centralized traffic control on CP's line north of Kansas City.
 
The railways also have operated several grain trains from Manitoba to destinations as far south as Mexico City with what Creel calls "super impressive cycle times."
 
"We're demonstrating with our customers what the art of the possible is," he says.
 
"And again, we're just sticking our toe in the water. And this is not what we'll be able to do, this is what we can do today on an interline basis."
 
The existing joint CPKC moves of so-called DRUbit trains of heavy crude bitumen from Hardisty, Alberta, to Port Arthur, Texas, on 12-13 day cycle times are a proof of concept for commodities that the merged railroads could export via the Gulf of Mexico, including grain, coal, and fertilizer, Chief Marketing Officer John Brooks adds.
 
Creel also addressed one-person crews, problems other railroads are having implementing Precision Scheduled Railroading operating models, and national rail labor contract negotiations in the U.S.
 
Two Person Crew Rule is Shortsighted
 
Creel says the Federal Administration's proposed two-person crew rule, which was officially introduced on Wednesday, was disappointing.
 
But he also seemed skeptical of one-person operation anytime soon given the problems trains can encounter on the main line.
 
Until pull-aparts and other mechanical issues become exceptionally rare, rather than normal occurrences, Creel says one-person operation doesn't make much sense.
 
"When you put a train together there's a lot of moving parts. And those moving parts historically have created some challenges. So If a train separates, and it's 10,000-feet-long, and you don't have a man or a woman to assist the engineer, that can get complicated," Creel says.
 
"That's something I'm very sensitive to."
 
CP is working with suppliers to improve the reliability of freight car and locomotive components.
 
Once technology and components allow safe, efficient, and reliable service, railroads should be allowed to operate trains with one person in the cab, Creel says.
 
Under a two-person crew mandate, railroads would be put at a disadvantage considering federal efforts to encourage the development of autonomous trucks.
 
And that would mean that railroads would not be able to compete as effectively as possible to divert freight from road to rail as part of efforts to reduce carbon emissions.
 
"To me, that's troublesome," Creel says.
 
Creel says he will continue to work with the FRA.
 
"I just hope as the discussions evolve around this topic that we really think about the unintended consequences and think about the totality of what's being suggested," he says.
 
Precision Scheduled Railroading Will Succeed
 
Creel was asked whether ongoing service problems at the big U.S. railroads are a sign that the Precision Scheduled Railroading operating model is broken.
 
Railroads have to have the right number of crews, locomotives, and cars, along with the capacity to handle them, Creel says.
 
"Different railroads have had various levels of success," Creel says, partly due to the impact of the pandemic and related crew shortages.
 
"If you don't have people, trains don't move," Creel says.
 
"Some things have occurred in the middle of PSR implementation that quite frankly stack the deck against these other railroads."
 
As the railroads return to full train crew staffing levels, they also will need to make sure their passing sidings and terminals can handle longer trains, Creel says.
 
"You don't do a lot of good to run a 10,000-foot train and it's got nowhere to land. If you're sitting outside of a terminal, and you can't get into the terminal because the train's too large, there are unintended consequences," Creel says, like depriving an outbound train of power, or tying up a main line while doubling out of a yard.
 
The U.S. Class I systems are experiencing "growing pains" with PSR, Creel says, noting that CP, Canadian National, and Illinois Central didn't get everything right under their operational changes under his mentor, the late E. Hunter Harrison.
 
But he says CP, which has grown faster than any other big system since 2017, is proof that PSR works.
 
"And I think that eventually, the industry will get there as well. It's just taking a little bit of time," he says.
 
Stay Away from National Negotiations
 
As a Presidential Emergency Board aims to get stalled national contract negotiations moving toward a settlement, Creel was asked what he thought of the process.
 
CP negotiates separately with its unions and does not participate in the national contract talks.
 
"I try to stay away from national bargaining, I think that with local bargaining, you come to the best solutions that fit your employment base," Creel says.
 
"On a national level, how do you get four railroads and multiple unions with multiple different sets of expectations to all get aligned in one common vision? I think that in and of itself it's a challenge, so I wish them success."
 
CP's train crews in the U.S. operate under an hourly contract with the railroad, which pays them more in exchange for removing the distinction between yard and road crews.
 
"Our employees are very productive, and they make a lot of money for that productivity," Creel says.
 
Bill Stephens.