CP Rail stresses long-term view after weather woes
By Allan Dowd
VANCOUVER (Reuters) - Canadian Pacific Railway will have to work to earn back customer confidence lost because of recent weather woes, but it expects any drop in market share is temporary, its chief executive said on Monday.
Flooding and other weather disruptions on CP's network in Western Canada and the U.S. Midwest have hit earnings so far this year, but the carrier told analysts in New York that shipping volumes are recovering.
The railway held the investors day in part because it was concerned that market fears about its weather problems had overshadowed news about its long-term efforts to increase productivity and cut its operating ratio.
The line outages resulted in some grain and intermodal business shifting to other rail carriers or trucks, but CEO Fred Green said he is confident the company has the resources to ensure the loss is temporary.
"Whether it is our fault or not it doesn't matter. At the end of the day it is our job to deliver a consistent product and we clearly did not do that in the service-sensitive intermodal business over the last four or five months," Green said.
"We need to earn that (confidence) back. There is no such things as an entitlement here. We need to get that period of consistent, reliable service," he said.
Grain loadings in Canada in the past eight weeks have returned to their five-year average, and over the past three weeks the railway has regained its normal market share, analysts were told.
Canadian Pacific has vowed to cuts its operating ratio -- an industry measure of efficiency -- into the low 70 percent range in the next three to four years. Continued...