CP: CEO Creel Eyes CMQ For >CN$100 Million Revenue

Canadian Pacific President & CEO Spent a Lot of Time on CMQ During Conference Remarks. Also Mentioned Record Grain Carloadings, and Other Events.

13.May, Toronto ON — At the 2020 Canadian Automotive, Industrials & Transportation Conference, CP’S Keith Creel presented a strategic overview of 1Q20 performance before giving cmq some big shoes to fill. Creel touted CP’s strong grain and potash carloadings in April and May. April grain volume was unequaled in CP history. The pace remains torrid in May, with more than 6,700 carloads of grain moving weekly.

Creel then jumped into the CMQ acquisition, stating that, “[The CMQ] is another big piece that I’m super excited about. I can tell you now that we are already winning additional business from the LPG side, originating and terminating, where in the past we weren’t in that lane, and that’s a big opportunity for us.” The LPG traffic holds potential for significant long-term growth and revenue.

Creel mentioned that CP is also discussing expanded automotive opportunities for the CMQ, and future bulk and intermodal business.

Best-in-class route

“That piece of railroad, strategically, allows us to answer the challenge that our customers have given us,” said Creel. “They wanted additional service opportunities. The domestic class route will go from tide water to key markets in Montreal, 200 miles less than our competitor.” Creel likens the acquisition of the CMQ as a Best-in-Class route, that will offer truck-like competition with truck-like reliability.

Creel detailed some of the immediate capital investments CP will be making on the CMQ. Projects to install 90,000 ties and dozens of miles of CWR will get underway upon the 04.June takeover date. Those investments are key to providing 24-hour or less service between St. John, NB and Montreal, QC by year’s end.

Day 1 ka-ching

Creel added that, on Day 1 (04.June), CMQ will add CN$40 million in revenue to CP. Investment and business developments are projected ultimately to boost CP revenue by as much as CN$150 million. In 2021 and 2022, CMQ will generate $100M in new revenue on new merchandise beyond bulk commodities and intermodal {Keith Creel, .

Creel did not mention Searsport in his remarks, but another CP source indicates that Searsport expansion potential will be evaluated after completion of key infrastructure components in 2020 and 2021.