Exclusive - CP Rail to lead industry in efficiency within six months: CEO
By Solarina Ho and Susan Taylor
TORONTO (Reuters) - Two years after taking control of Canadian Pacific Railway CP.TO, Chief Executive Hunter Harrison said his aggressive overhaul of the former industry laggard will soon hit pay dirt, with its transformation into North America's most efficient carrier.
The gruff rail veteran said that CP, the country's second-largest carrier, will roll into fresh territory in the next two quarters as the lowest-cost operator among Class 1 railroads.
More efficient operations open the door to a host of new business opportunities, including "everything that might ride the rails", said Harrison, a Memphis, Tennessee native who still speaks with a drawl.
"You're going to see a good second and third quarter. I think you'll be impressed," he told Reuters in a phone interview after the Calgary-based company's annual meeting.
Canadian Pacific's first quarter results were bruised by ferocious winter weather that ate into profits.
The surging crude-by-rail business, while just a sliver of CP's overall revenue, is one area with strong growth potential. Harrison said the company has the network capacity to move triple the amount of crude it hauls today.
CP transported 90,000 carloads of crude last year and forecasts that it will move 140,000 to 210,000 carloads of crude oil a year by the end of 2015.
In 2011, CP scraped the bottom of the efficiency barrel, spending about C$81 ($73.80) of every $100 in revenue to cover operating expenses, producing an industry-worst ratio of 81 percent. The lower the number, the better. Continued...