Canadian Pacific Railway Limited (CP) 23 Oct 242024 Q3 Earnings call transcript

Good afternoon. My name is Marjorie and I'll be your conference operator today. At this time, I would like to welcome everyone to CPKC's Third Quarter 2024 Conference Call. The slides accompanying today's call are available at investor.cpkcr.com. [Operator Instructions] I would now like to introduce Ashley Thorne, AVP, Investor Relations, to begin the conference call.

Marjorie. you, Thank and everyone, for us joining Good thank today. afternoon, you

uncertainties on I Before regulators. may contains you risks, Slide that X want and described this U.S. press the results begin, Slide influence differ other measures actual could non-GAAP presentation The in results remind and on Actual MD&A also to we filed This are Canadian factors X. presentation information. contains materially. outlined release the and in forward-looking with

Redd, quarterly today regular Velani, and and our their Creel, to supplemental available Officer. Q&A. revenue addition in [Operator Officer; our Vice will note, Officer; Vice Brooks, President President combined financials, operating at by QX and Executive Please Nadeem our Executive The be Chief Chief investor.cpkcr.com. With is President data Executive followed our performance John me Financial and here Keith Chief Executive formal our Vice and remarks Operating Chief and Mark Instructions] President Marketing Officer;

CEO, our It is now and my Creel. introduce pleasure President Mr. to Keith

Thank you, on 'XX afternoon. quarter us with third our and being results. to for discuss today review and Thanks good

the early getting and bounce and up network back shape. with July share that and to what August, the the both as exceptional They a strong in it. our result, operational of of of can derailment in tell pleased I'm you CPKC strike family. following body in challenging and faced in very an responded was the the work XX,XXX dealing significant which quarter I results team they job did back a Mark well

track the than to which to including proud what you, double-digit volume better had on in growth, year. the deliver remain projected we earnings In challenges, guidance. spite of tell we growth, we're I'll full is earlier year say

the was share of increasing an delivered from ratio which $X.X most X%, per growth, of XX.X%, personal increase revenues So importantly, quarter, earnings training specific which CPKC perspective, X%, up access volume the X%. a the billion, an of X% a decreasing strong improvement, and over is results safety family XX%, increase the $X.XX, of continued for to operating injuries

On as Mark outage strong our will of unique challenges and We're industry the experienced a recognize generate growth. that specific strike. his exceptional strike. for I'd customers to They the John to today. network, as but profitable like the best, color the operating across to that from operating the the of a result reflecting bit service Commercially, products offering job and specifically the did with going and to continued those that's performance side which delivering team team continue bouncing strong provide well the with sustainable, to, a back an with results to we market you to share preparing we're

pleased from quarter. over both New received week last for another I'm that connection approval Mexico MBNR our the and exciting Texas STB The U.S. development the new in the and CSX direct that's we with

Southeast pro-competitive review over specifically STB of like again, this thorough the I'd for their to MBNR and thank transaction. the corridor. approval

story new a bring the that It's we're the to road. another going again to and with The unique CSX provide delivering. rail customers to grow competitive off example to trucks It's franchise markets. this new our interchange take established the solutions of service going rapidly CPKC is growth new as

and again commitment of including will X diesel comes first sustainability. concept it loaded to with I'm company's our that of milestone pleased achievement to early program train front, our fuel another hydrogen locomotive very the reached joined horsepower the a hydrogen in to center locomotive our locomotive in September, hydrogen leadership in locomotive fully impressive bulk Certainly Western On quarter. demonstration Canada When the high along say the corridor. the this

has produced. great to an position finish team in say 'XX more closing, the a quarter, me in start even to strong So strong let Were transition proud momentum. to a fourth exciting a and results off the for XXXX I'm and the we're of into

Mark, over on going the to the some provide to I'm hand John, provide to Nadeem on color operating wrap comments that, performance. With the numbers. market. on will elaborating to it And up,

Keith, afternoon. and good you, Thank

speed improvement continued X%. Gap] From Looking average and operating just quarter, by productivity service. X%. strong hard to at at improved Locomotive the the I efficiency Average by fuel railroaders safe off the In quarter, year-over-year terminal work declined I'm... [Audio to X%. third improvements. very continued and look reliable increased drive train by X% round the we dwell to

efficient, results are an this faced demonstrating delivering display. of the our proud results impressive challenges given is strong that are I'm in service network these quarter, to of resilience the teams particularly the fluid, resilient and of network These All the customers. we

operating one best seen network disruptions the that my contribute we with the As And quick, operations. navigated across to partners efficient of rail and frank, back interchanges work customers, up. it preparation you the started minimize through we to transition And a back we Keith was stoppage work I'm working as X-day that this this and the normal in mentioned, Canadian closely to to I'll pleased operations probably of we that say our can as the hard to the have our thanks team. be team. and I've see career operating the an team

deliver But to expect. strong well customers positioned behind to and service contributed that delivering to who are all is -- us, and that the committed to Thank you has work outcome. we're our the to we this stoppage railroaders needed continue growth

an at the FRA results, but were X.XX, to injuries, look train we for pleased I'm Looking these at with a frequency always strive is we further X.XX look which year-over-year improvement. And improvement. journey, at is XX% safety the personal I quarter, year-over-year. if for safety will at X% improvement at accident

and slow also from preventive Part the efficiency, We investments. in the across execute of efficiency The delays. is help are orders reducing maintenance testing coordination leverage also cars continue plan network operations capital number operating autonomous data a significantly performance. and in investment to engineering that the of improving accurately and initiatives geometry on the to team with improving us train a

-- have or be benefits forward, to across CP excuse are American and interchangeable as of so these interoperability network locomotives the legacy these to end Mexico KCS cars And to to trains me, into the XXX we our lead deploy across investments upgrades the By Looking fleet we'll Canada. as upgraded North as fully our make additional out well. in we and there the specifically roll network. can year, we of about continue

Through of of commitment. to $XXX -- the X this to year as have the well. at merger we targeted million capital projects Kansas first Looking executing year support commitment through the sustainable quarters, and sides along serviced capital we and the sidings X by the with as are City network. plan part area our new come around growth the in safe the capital investment will end in be that online Two will of

segment Capacity fluidity crossovers in new network. streamline and We've the our with our the Kansas legacy networks, improving capacity service along X in and help in in City in track yard also connection through networks, ], align the improving growing service further Escobedo of us Mexico, X of this [ realignment key sides and will our a between key corridor.

in investment the improve our yard served QX. we serve the targeted to dislead trains is service increase in and are These mainline in can signing operations local to on throughput. customers, another Mexico the efficiency of capacity run where The in clearing projects go we so way, scheduled mainline

opened will still the be I'm Laredo Finally, by the second bridge, time pleased on span to year. the announce with end of we're

capacity, enthusiasm first to of strong Before is a to we're I tests high to deliver over in fourth like ahead hard horsepower and phase QX. completed in our of efficiently, result to a of In tremendous objectives. lot It's investments his shape, of in the dedication our are and network my it commitment a turn we work John, a have the hydrogen sustainable share excellent our momentum accomplishment. locomotive safely, quarter. I'd is operating This summary, creating

that, With John?

team with stoppage despite line you, afternoon, I'm delivered in All Mark, pleased work the the right. good Thank extremely top performance and the the everyone. quarter.

and service. capacity We of and creating opportunities, the we on delivering value unique pricing our the the strong have we're product are in service the to

Now looking results. at our

growth delivered a performance of RTMs. X-day that X% stoppage this was work Keith headwind quarter, quarter. revenue in was a on X% This X% despite and RTMs freight to and to, increase in the the This we spoke Mark

by Our offset cents per pricing, RTM was up X% mix. with strong partially

performance, with bulk. Now taking volumes speak prior over U.S. were grew a the up X% adjusted RTM Grain closer third at Starting growth. to results. revenues year. XX% quarter our FX on grain the look revenue XX% I'll

customers. the connect create Canadian to new increased the in from growing our new harvest wheat ramp-up regions, for Our volumes our across opportunities Mexico grain benefiting as and franchise X% is Mexico grew production of and to markets we with and increasing grain shipments Canadian Prairies. strong

Canadian production as held we grain in are forward, X-year ago. and with on Now crop year favorable looking line in average, comps XXXX to and our farmers their early a QX expect our

coupled volume positioned Canadian of with has pricing grain grain. regulated setup, in that X.X% favorable well Now approximately us

So whole, grain and deliver all with X XXXX. into across to QX our as expect grain are countries customers looking a results strong ahead, for into we well and closely working

Lower strike for ship remained export last has In potash impacted is and lap as in higher a volume solid, an volume. We loader coal up demand Portland Coal Bay. with this up Vancouver at X% to all-time demand U.S. of a natural coal quarter, XX% moved Thunder X% chain and potash shipments high. were to year. Since potash, in we the our the stoppage revenues demand the volumes supply and prices outage Canpotex X% the the potash ILWU Canadian gas on weakened on growth. strike terminal normalized work was our service for decline revenue and

into resulting coal network. supply our QX, both seen chains move we we've volumes stabilized, of in these on As increased

by Plastics XX% merchandise. and growth. to revenue Energies, the was our over and in more quarter on share across multiple wins Volume driven volume initiatives, Chemicals X% market growth Moving synergy commodities gains. self-help grew

for ramp-up demand business for set ECP. wins, QX, and at Now LPG, ongoing solid with of year-end looking for these are we growing the up a

base Products both macro is This Forest were that a on soft volumes environment, our an continues we X%. area impacted business. book down be by and experiencing are to pressure and revenues

can the these on to are offset and strength unique franchise position unlocks. as are we with control future. that length this We're I'm impacts extended the haul. that in of area our be focused to confident the what unique rebound this growth going partially a and markets construction in our opportunities in and We and able we synergy paper

revenue Products was Consumer down X% X% and and Minerals volume Metals, decline.

labor a the and sand it from volumes frac base the a this along area ramped is of facility back up Forest slowly like macro following Mexico lower much in softer products steel impacting disruption. as business our area, Now in with

segment of XX% the business to quarter shortly on with service XX% volume volumes solution benefit to a our loop automotive we haul our across growth. Moving the revenue introduced area. after continues This control up another reached that closed developing network. from is longer franchise and KCS record This

new compound capacity certainty had like Giving with supply our expanding deliver other chain reps and OEMs. for auto an new us them Our along new they've entirely investments competition, never helped before. the to Dallas in auto compound, and Chicago has model service

we looking Now years drive compete business and to in benefit business to growth our we to forward, gains as the differentiated auto for the from new ahead. expect opportunities these continue

intermodal X% growth. volume on side, the was revenue a down X% On

year that which down business on very MMXXXX/XXX Intermodal. This partially offset was short-haul domestic impacted customers Mexico to the in market. in continues was Domestic work extremely an some challenging truck. perform well otherwise and X%, with service stoppage of our cross-border shifted Volumes last their Starting by were demarketed as decline to growth late lower temporarily by business

a to unique the our the one for area, this new STB's MNBR a take routing transaction. in opportunities and many which to enthusiasm just looking we shipments strong opportunity will we of share our like of controlled optionality forward, example this our retail in temp offerings. of Now my to service also offer including developing, continue efficiency customers. for that opportunities This I'd approval is wholesale, have pipeline several also are

the scope volumes of creating out Lazaro. number grow come we we due with more excited On our XXXX our their primarily service were expanding key of year who international In impact ONE the in adding as we resiliency cross-border into test More XX%, contract customers to of shipments this with up diversity ever our a Intermodal to up about ] move their onboarding but that chains. ago. lapping and front, space, strike our to into opportunity are are of new [ the International are supply port and interested a started in to June

better a in position our RTM impact pleased expected, excluding stoppage, to to year. the the to the are unique outlook and we And in I'm pricing. strong of have than we remains macro growth certainly So for self-help while very few our and work of came mid-single close, to volumes digits sight opportunities from improve line challenging areas, continue a to in synergies,

spoke that accomplish team X Our to in I'm outlook is we'll reliable operating and across the and this to, And so supported Mark our that years ahead. countries we've accomplished what the far to continue resilient of by deliver. excited very service and continues year

that, to over With it Nadeem. I'll pass

Great. Thanks, John, and good afternoon.

that railroaders challenges continued execution disciplined deliver execution unique growth. despite marked performance also the and was of helped our is team who delivering thank of by I'd quarter. strong core in to on results continued focus that quarter This and like our these strategies best-in-class

XX. our the per $X.XX looking adjusted $X.XX, X% XX.X%. earnings at ratio ratio share was core and was adjusted prior from results Now reported at core combined on came XX.X% share up was Diluted CPKC's combined year. operating operating diluted per and in Slide earnings

crude year-over-year expenses at comp year-over-year or to our Slide compensation we higher from an inflation adjusted I and speak benefits games optimize increase GTMs. as to weights, and Comp benefits an the in volume-driven the FX-adjusted partially a expense was gains continue fit stock-based The basis. along efficiency higher by basis. product XX, overtime on other increases on million on driven and by variances closer offset Taking network. improved $XXX with look train was improved This million reduced was increase from $XXX will combined and utilization

on roughly continue labor basis driving QX, year-over-year flat gains Looking we as to particularly we to volumes, further average bulk. be at expect to headcount grow a productivity

decline in fuel $X in X% was GTMs. on higher for was improvement million The and by a $XX in million longer basis. fuel savings P&L resulted offset trains, lower or prices Fuel were expense the $XXX efficiency volume-driven and heavier from by expense adjusted Materials running $XX year-over-year. an quarter. savings These million, down for X% driven which partially increases million was

driven higher utilization year-over-year GTM increased with from by inflation. The maintenance higher fleet locomotive along and increase was

quarter. contract net We also and which in offset savings expense, in in-sourced material maintenance the in a quarter, but the in locomotive favorable other resulted services with incremental purchase the

higher higher participation were velocity, cycle by fleet down decline X% pool, year-over-year. partially offset from the efficiency rents with The Equipment payments million, driven $XX inflation. increased was receipts times car along gains in reduce from network improved and by increased

on savings partially and XXXX inflation. savings renewals. was services insurance intermodal received higher impacted expense $XXX a was in $XXX gains. see of casualty Depreciation continued and as or million pleased as proceeds costs synergy amortization efficiency and were adjusted reduced on well increases asset Purchased expense I'm lapping basis. These year-over-year, offset line X% services efficiency in-quarter and resulting by in-sourcing by to synergies an and base. insurance higher expense million was The other from QX up and

these inflation impact forward. be structure the lower to with continue going gains sustainable cost and improving along We our of expect

periodic year. was expense $XXX We As of $XXX we The the was million, XXXX. core basis. move on the reflecting compared purchase the discount CPKP driven to million $XXX rate recovery was Net XX.XX% be impact line XX. or below Income lower was core expect tax million adjusted components interest a million combined benefit adjusted in approximately expense of Slide $XXX by on excluding million decline reduced QX, balance. rate effective to $XX a net to tax The see debt accounting. or for now

Turning XX. to Slide

in $XXX this $X.XXX growth $X.XX priority. safety of in to generating strong cash continued by expectation and our with QX. provided our reinvested We remain cash we XXXX. approximately billion with flow In in quarter, Capital investments in billion operating are activities line invest million,

merger growth Mark combined has strategic that to capacity As and the continue our in to continue cash this efficiently generated to million adjusted discussed, us investments free absorbing make $XXX continue debt. We in flow we enabled. repay positioning across network,

of Our early our at we we and in shareholder expect will Board. returns leverage evaluate with still which leverage ratio XXXX, is target our X.Xx reach to X.Xx, point

of the on net the driven discipline the work $X.XX continued the QX with review deliver to along to by team year-over-year price supply loss XXX was headwind respectively. impact and of along diversion EPS in industry-leading primarily continued revenue quarter, to and and from That or with The ratio for operating temporary cost quarter, and In growth basis basis control. volume points chain higher stoppage event casualties delays. XXX combined point a headwind stock-based

believe in were improvement that for As positioned OR QX. we all year-over-year we these in isolated and well the quarter, impacts sequential of are

on at Our all an of strong It's combined we that to had our year strong us us. improvement have in the well momentum into XXXX core volume a and from is earnings core adjusted track feel about opportunities beginning puts mid-single-digit and good at as which growth of growth, performance deliver head we XXXX positive ahead the double-digit view the industry-leading.

With that, Keith. to let back me over turn things

Okay. questions. open it let's up Thanks, Operator, Mark. for Nadeem, John,

Instructions] first from comes from Your Chris Fargo. question [Operator Wetherbee Wells

thinking Maybe of want railroad sense take some I kind I of perspective? out get risk seen I like get coming higher how a if level, guys of about something Is there. of from be curious form potentially Mexican concerned about about could that on if what I to start are we legislation, your a down that? you should Keith, we've could kind was

Chris. Great point, Yes.

would president point, with has I it happened feel that's previous meetings kind the encouraged. understood of the face-to-face progress say this new that clearly the some only We think mandate the summarize best way had I that. everything had reinforced and some I to from government. is at way the about

was I the on ago, weeks I upon hear encouraged where it And city X faster ], of aspirational very Kietro adjacent couple to along corridor for at dedicated [ guess, freight, not is in in a our with a the the the fact, Sunday right-away. platform, a our but expanded create that. destined vision the that training was for President away, right announced protect to in Mexico which tracks is committed passenger been only

uniquely So it think I complements.

and The I'm to be business environment. relative the to core thing road off the comments encouraged by. to pilot need very to other the In environment capacity, additional additional create to The commitment to railway. the get trucks bring her friendly

So of think with they're And growth as sovereign we brief on very think I a the that's part part good the solution. plate-commerce being spot. are long I a system, in a solution, and of as strong part country focused of you're

So again, encouraged.

of That's sort And just Okay. helpful. on point clarification. one

Nadeem, short the seem they're could that up. some fourth about RTMs I that quarter OR and obviously, maybe back fourth we some the a should ramping for operating perspective. accretive growing specifically? know here on other Just could in quarter term don't in ratio the talked you a put of both about be bit in if think point opportunity little sequentially Any you opportunities the improvement thoughts incremental because year-over-year quarter. finer like in the fourth probably the an There's from of

Yes.

labor And basis was Bordulac derailment XXX very that and a has so to about expense in million headwind Obviously, Dakota the had North we had that $XX OR in QX. a hit. we that disruption point unfortunate

in soft-based QX. big And was so unique a those headwind X comp are items,

opportunity operating the bulk tuned. in Chris, We a for move those I occurring basis Grain the crop of have XXX not at think, We fourth look incremental ahead a at we onetime strong leverage. a had the of ability factor and to started to a outlook the the items robust off it. as whole has OR. quite point kind had a when and believe quarter that of So again I strong. stay all opportunity sequentially in We'll low I that improvement to have at I cost, together look

Spracklin And Markets. your from from next Walter Capital comes question RBC

projection I a mean like on growth your to I'd you about expectations increased So here your talk volume for year. here. this bit

of backdrop a on curious, Just still this macro a weak is environment.

a presumably, little Can kind here. a you talk getting bit lot esoteric about those? you're of So of volumes

seeing somewhat bit new opportunities billion of, on $X revenue you've particular, upside what's even kind synergy your rethink or a in little developing revenue is of $X.X seen on targets you more And network? and this that XX it to upward revisions billion, of Are kind you pipeline causing outlook? to the your as

for the question. Well, maybe I'll start, Walter. Thanks

sort about, and the Missouri, moving Minnesota spoken the Upper Focusing we we as already bulk strong encouraging. crop, is grain only near well-known only franchise down also on Not do have Canadian but that crop have Dakota, really has the of legacy But team region very term, not think a our KCS also our Plains in strong region. into North well. a I

that at to going I'm say as lot to green space to relates incremental margins. really, the storm freight it move opportunities perfect So low a and of in

look we've front, Now beyond from Mosaic some given bulk, in record QX on said, the Canpotex in domestic demand and I if also potash but coming export the as that had on struggles, got, you others the the of front.

a have domestic We now pull right strong also. really

and feel potash the fertilizers really about I good space. So

And our frankly, in and opportunities, only catch-up Elk fair maybe also of but coal U.S. we legacy with to our franchise a in some not demand of amount Valley do the stronger Canada coal have

Intermodal new continue to in are across seen in our we uptick So well Canada, business well. up the MMX and We've perform bulks our set an Domestic service.

if headwinds growth the I I on that business up of last believe, of left we're looked for XX%, you on kind think the some that network, the neutralize train. year on our in I the

there. outlook good So

growth been continues with the services COVID, our Saint tell with John will the year it's and out really since our now lineup Intermodal of to tough frankly, some fact, Intermodal, good up Port right there. customers International to close strong. of those move to really out how we're And but seeing look in International volumes down, out

pretty I decent area. feel intermodal So about the

the extended and to maybe going is, But merchandise in the product we're your and, the your the Forest franchise opportunities of length future. a Forest many battle foreseeable merchandise of those there's haul us said, of and in bit unique been those areas would in product we've I space, for part areas. the able in frankly, continue maybe to outpaced some little so the question development and space As that in say, think of I ECP to, makes business I leverage also industry to new what

in me is of And comfort that to areas any be it's what those tailwind. we some rebound think going I see of macro start gives quite sort a to

happen. So all that of feel comfortable year-to-date now. our to the customers around like. sit with years. to alter to I as supply X% as through of in future of and I on I terms the out certainly is we say, I'd that in believe improve with and chain think that make out we I in roughly move RTM what that And looks frankly, our future outlook leave see XXXX there right at demand what into hard couple look Work the is it months the the I But year. beyond the those bright final

John. appreciate it, I color. Great

John from Evercore from ISI. comes question next Chappell Your

going whether to From whether with the I'm RTM are you. we numbers strong. per or John, yield, carload, you. per way Thank it's measure stick any pretty revenue

pricing but pressure a there. and I bit to revenue So little per from wanted on of just just core also RTM kind perspective, highlight generally Intermodal a of auto momentum,

competitive of Is service any lagged been kind issue? that Or between haul segments that kind Was pressures a have of a length there new those more extreme mark-to-market? the maybe portfolio? that were of

Yes. Thanks, John.

You the it. stats. nailed give you I'll

our and about XX%, up was quarter the in XX%. length haul haul intermodal of of length automotive Our

saw numbers. is that those exactly you So in what

that that of and contracts. team I'm what in has candid. for in the that same-store X% be whole, do outcomes XXXX we feel performance, those taken a good out of pricing you as As I'm about confident capacity We're as the this say, north a And with our would tailwind year-to-date of looks lot of our this about the terms us network value service and we think like. I has. those a running discussions super just pleased that, and actively with of that gives park nice

certainly But with the more catch-up rate that the That start look, certain we're there all XXXX more may of spot And little the there's a space as trucking bit into a doubt see pressure. in bit honestly, we move intermodal has a in feeling tightening capacity little areas been for we of little to opportunity. No And space. challenging. cheaper trucks.

last I to and at guess as sense into the just for you RTM, fuel QX, maybe on. point, headwind you a maybe that John, looking are it out, significant keep point to relates think pretty as know, important I an just eye if to look but the we something

Your Fadi Capital comes from BMO next question Markets. Chamoun from

staying Yes. bit. on side a commercial little Kind of the

we or if or And insight into mean your you lines I into was the And what in noticed into think, service X their XXXX. start up might Gemini wondering part I any of as they're serve they this translate announced go have some their schedules, of So alliance, you February. we've being network your the in share that kind of highlighting ports kind loops.

the XXXX, XXXX? in pipeline for some us And at think I in volume rate if what look you for run not kind guidance like as months like kind said Or inside on prior feel will prepared you're can you call, $XXX the what can that? progress look exit XX discussion this million give this Keith, does of this from provide we a now, growth follow-up point if of talk into you any to like earlier, synergy come you about an idea of 'XX,

Okay.

where the strategic. level our pieces to partnerships relationship I with So amount we very off at have had strategic really, to and can Certainly, to of there's Hapag-Lloyd, highest long-standing there, we Fadi. respect Gemini. say, unpack to I'll grow, would a tremendous with between few a expand start a our companies be

their alliance. about prominence feel good very we certainly, So part that as of

assets As land the in over in most into years, we've only and build the the with build But with business our know relationship their our that into Vancouver, we U.S. our them to also, IPI grown where our utilized development down we also of and we've with transload facility and facility. partner recently expanded Canada Maersk not relationship trust steadily our

excited about our they really the philosophically Gemini deploy and So their up port operations Keith they assets precision their Frankly, that rail on terminals in how want think model matches we deploy their drive feel ships naturally, I Mark and and how their basis. with daily really to a opportunity.

but as And as Gemini the the what has the with Not I the working I yield APM that's making, like but we that take, and making just it's through that synergies initially as and business. Along days, commitment grown really the they're or to initially specifically for Hutchinson's with to that grow I we think fast making positive and like, thought hasn't investments hasn't grown we're and much thought were see out strategic Lazaro investments early Lazaro that asking opportunity in where terminal. a going scenario to Lazaro could That the mention for look a you, is grow think to or as to cross-border American North see about. instance, volume it in through we I fastest you maybe begin still growing to there. will that's terminals that port tremendous opportunity that relationship.

saw last I I XX%. you, XX%, our rail think tell can volumes up. volumes are up the I are year-to-date,

we of, Mexico. I are again, expand a that But we number majority seeing that and again, would is fair say, singles of service. doubles the as Now servicing domestic

on last Gemini. Maybe piece the

at port. terminal the TEU this to potential mentioning at of cranes beginning function made to Port the a year investments from capacity with next in is has DP XXX,XXX World that think is John, of Saint TEU really addition development XXX,XXX at I the worth that of with the year unlock that it's

to growth a million the potentially just into believe you couple partnership So this example I out exit Specific in think only $XXX port synergies that another of to and how exit Obviously, really the service an again, expanded we to feel year. the in calling generate continue of run got go our months to run of rate close rate, with good. to I XXXX.

MNBR, unfold. Americold business probably on why I'm XXXX give you'll doing in the to things our feel allowed any Lazaro, I Gemini, than to opportunities the execute guidance City no begin Kansas into other not other and we see development if do, project beyond keep we in locations you the we that reason

you've I first, pace of South. controls. North at with our gain We of can't see guess, seen service the synergy continue why number through no momentum years that growth continue we see reason X I to our MMX the that

And next Research. from with Scott Wolfe question Group comes your

So I for if this know don't Keith. is or Nadeem

year, teens of the last might buyback less talked I I high sort It sounds guess, be buyback to probably As 'XX that, about multiyear than like a the back revenue, next is don't mid- yet. to to have And upper going Day the because you told you start us I right, think single-digit year. think Analyst growth. you earnings

puts and any thinking for I that Nadeem, know this less we should So at to more takes year that likely about point Keith, be that play you out? next about or know algorithm makes

with our of that buyback said, ] captured we'll we think start we the [ but was, CapEx Nothing once growth getting now, to is results. guided should revenue in formal terms seeing We're far that obviously, X as January a multiyear year as guidance EPS Yes, benefit well. it double-digit which you mean, no buyback we're said, I to changing line range. Scott, growth, program. in as ] we what give last around X single-digit our you our outlook. [ you benefit high I But June, not QX X next of And holding as to X the reinstitute

exiting fully at an grow to are crop give opportunity wins We strong ahead us we've XXXX, industry we So as idiosyncratic of got where a key I I next us. our synergy growth again and expect. to we're and a know be would some of opportunities going know leader look year, very

So hitting we our assume stride is we'll to what in start guided XXXX. you that can

And mentioned numbers. our terms of so XXXX you shouldn't what just why be in to able reason no we

Tom next with comes UBS. Your from Wadewitz question

add terms some that about that potentially you know where give to and wanted optimistic thoughts of could as I but 'XX thoughts in you beginning also, content be some if if most don't John, capacity at see, just about some -- XXXX optimistic of in should more where really continue of enable the markets? markets I terms might in more think can growth. some you go some strong specific to, do creates opportunity in on to growth which investments what drivers be just be you we guess, Mark And then capacity, made I you

Tom. Thanks, Yes.

XXXX what we're terms on we're base count there. get my to year could think but book least tailwind if some a in turnaround certainly, organic closing I shape don't I out this little So in out for, hoping not of know we're the bit we're up, it. at mind, how see And a going to of rebound going and and

repeat list to really over it excites of and me. synergies. growth believe there's diversity growth Saint with the in of down Vancouver, is think, for just an I with now quite going a International I good in terms as initiatives with to and Intermodal And rinse self-help I or in other us gives platform. that spoke And and that This our opportunity across I strong deliver not is do Lazaro, that kind John bit players. only Gemini a to spoke

we're a MMX running up get not bit of on still on that of Ramp trains quite marked that lot me service. a

continue have to I to service. price North-South and so a definite into that fill opportunity And up

Now is on on a variety I [ pipeline opportunity haven't a the good different really whole items, refrigerated and strong van scratched we of the auto even and surface ] product. of decline see parts our on dry news

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of lot the we of job I we in presence world is the think areas, singles business area expand accretive And a done how talk But again, has maybe And markets one as kind a really our about last to our team the doubles. great don't an business, and also of and there about portfolio. the It's Tom. in Texas, Dallas. particularly carload of our

we those to transload golf really, service ongoing region think seeing, and and demand we're markets. business our that grow down the the solutions our markets. terminals Toronto in in about to Canadian How that expand then as in fuel also you And continue creating there to Eastern and aggregate

really So a we area those to think and really offer are going to service have rolling the you I few ones that of key about of out we've that be lot got we did are a product there contracts because mentioned over those as auto, that think good a Tom, still OEMs.

pass in these From I side, the on, getting obviously, of what say, John the off to we trains. separations, to what on we brings what run We need earlier, road talked yard capital as on can sure separations. to mainline would When some continue can that's parallel an don't we make services. where focused local we're we locals this operation business work with

create product to line we'll other go soon, XXX, thing at amongst capacity as bring and this end and the double get could a of it. We that finished biggest the Laredo grains really of will The finish the other year that hit well. Bridge. bridge We'll across it that made XXX here the is investment. of KCS across across capacity lot

X path we today could miles create for as we one purposes, speed years as car bypass where car just piece railroads Kansas just as it want dwell that for network. want city as look to don't it drive we per City to ago, Kansas is Another into for day. really We everything at City, treated we Kansas

working changes as through capacity So well. those

continue the they business, can can expect to we customers serve. to John grow serve but So the as

with And your America. next Bank question comes of Ken Hoexter from

was on kind improvement. before potential that for or points of basis Nadeem, rundown the sequential great a XXX

want you basis difference. clarify, to there. I the just went you XXX understand that just quick point about want basis You the XXX sure impact talked so point I impact. Can just the make you

get And cross-border. should be this thoughts change question the Mexico, we few If thoughts for we potential as next your maybe additional for here, about John my Canada, then weeks? to over on tariffs. is prep on administrative we an How thinking imports

part million on one costs, derailment Ken, XXX the of year-over-year Yes. of a comp in $XX then $XX the was we year-over-year points. came impact increase particular million from basis as And had in stock-based Bordulac.

points the from of combined impact that, the with stoppage is XXX So full work basis XXX points. basis the

or whatever a it's the to kind look, here kind even going America double staying the for is in see, really maybe play, into I how bit out. in to the Ken, a little North that bit on the and commerce down Yes, on line of administration earlier little Again, obviously, I'm and basis of America. comments to support that's made around encouraged desire around administration resting grow recently to play wait little of a Mexico support Keith bit most commerce comes the Mexico North fact think important. I the

X administration I the ultimately, think and for think, that administration during current you created countries. into, to won whether ultimately And obviously piece day. the maybe previous turns a that, policy USMCA of back the look was one Trump first good at I the the what or is

in file. and So government we'll whatever also we'll in in whatever may to U.S. navigate Canada. not and or navigate active, no is with as we tariffs going it. future. Obviously, with this may We're we're the on those like staying into customers be look place close doubt Mexico our the move And

from comes JPMorgan. question Brian next Ossenbeck Your with

felt broader say rail, question and just of already elections couple passenger Maybe reform administrations the of there. the you've a just both the for of with transition follow-ups Mexico. this the of some in constitutional quick John act you in Would U.S. the uncertainty tariff and the

foreign investment little I a for while. pretty direct soft mean, has been

rules of certainty you've of there's some felt the potential this in you the of think and terms are? when to what some seen the for it and game do So improve already

-- like green with of the shipping there's maybe some been just your competitor specific then handling border And some of there. trouble looks more it south over the

grain and the some you opportunity strong to the circumstances? So pick then second about additional guys harvest bridge up share you think for an a of given that's talked the I Laredo,

there me customers slowdown we huge continue work is activity opportunities in that terms to Mexico for gets through I It goods, sort to a so in support see, with about white hard of think talking to been tell any auto bit. impact. actually remark appliances, plastics, the call it's the the presents that to cross-border industry, or shipments. to There's much really it of prior those announced that's We're our for down not. little tough

think really any at point. this I no. haven't my answer effect is, I seen

tell foreign in terms recently, announced in you there some moving of apprehensiveness forward just I some in front was whatsoever And with can into investment actually, folks we their that that investments. was no Mexico, just from are going down and production of them And most down Mexico. recent

So going plays that to out. I'm see how have just to

the to support a think sense. continue American continue to economy just make fundamentals I North

the oversell. the But heard I challenges grain, look time. not that. we've of going opportunities network. migrate oversubscribe, be in We're you've to long going also grain We're some think I'll to certainly disciplined to seen our very like. from you on to some Yes, opportunities about not mentioned this us a going what we're You those tell

it certainly said execute -- back seen our burn with building Class the can we paramount. And number new as trust are customer that X get doesn't take with because business them, of to times, is done railroad. we've has that And to that mean on do. if not the it you to because a other market willing also going that harder once to it a sure became lanes work those But on lot and sell we're to I we're we in make partners we want

talking you're certainty last, that that and is I'm understand our darn each And said team think, additional I are us then grow grow capacity and guess those promote, also give something making the you continue with fluidity not bridge, lifts down Mexico will that the sales with to going Laredo, that team we're It right, opportunities it's and second myself I through I believe customers my but capacity our that about. only sure tool. gain to world-class

team future. for the my in So significant and opportunity a presents

The with next from James. question Hansen comes Steve Raymond

last to grain. your John, on I up want follow on comments

I relative X you've in or think or initial for but in far expectations? work your progress grain characterize movement somewhat crop North-South past that trying you've the you quarters obviously now. would establishing to how the spoken Corridor Lane, North-South X been grain your pretty positively it's to dependent, on here to North-South so new

we're say that of ahead little on a I'd front. bit Yes, pace

legacy If our I the no I grain of of we're, CP coming KCS front, be network, synergies order, Steve. want you would think that's terminating off of network about in on on legacy say, makeup pace. and just But to the ahead that

shippers, past. into scratching My the never complain believe surface in different have like always excuse Mexico. that optionality the go my CEO terms good for we're had in companies truly creating enough product the they've markets just of tell I South those into sell grain would me, to I we that for now. grain I didn't to don't and into markets really We've service have got and a always

grain in across not terminals. Plains in I'm into excited down XXXX all space of bring what Upper of terms of Canada So out can our Mexico only that super

would railroads the competitive to X grown a That gateway. estimate complex the I congested and as is line customer Steve, more capacity, stronger gateway, reliable involved to very alternative gateway got power opposed much think, gateway that's I you've with only the more single value kit one. alternative, to of the the because And is add for the the

additional the the by risk supply adds Just complexity nature, to chain.

the So as makes challenges our competitive a value no in challenged these times, compelling. proposition alternative even with it more is even for has route

Stanley. Morgan question comes Shanker Your from next from Ravi

surveys in a our a have months. MMX shift just recent So follow-up. towards by the customers service Kind of shown

offering there? you has Is Or of commercial that strategy and the go-to-market with recently launched changed since it? something your a maturation just

and were with to going could basis said what did And if you've sales I'll on through It's tell the we box cycle day do, it day straight news we we literally and every we customer us X example, see significant we maturation. that's actually that and good -- through going called as of performance measured is rewarded going speak. business box we we It's is you we an give I'll tested think right. Ravi, the you piece XX a a to one were days what they've said for to per exactly deliver a have process. going It do. I our we starting up a

So you sort quarter doing anticipated. been trucking progression. the natural capacity base more the it a of now tell a I all a little that bit the do the of believe in challenge I a and has of of that in in I it's of surprise headwinds challenge than

And up as offer portfolio your quite to CSX work just begin Meridian I'm to Speedway done. worked options partner such continues sellers well. this and expand to either with offering now now Schneider, when product the kind be the NS you pleased to really has of hard that able a with with the of or our in have transaction, corridor sales our open we the shippers. the can performed

that a optimistic of you'll more in to of step be So function going I that train you're continue growth see pair. to

Your from with Ari Ari, comes is Rosa Citigroup. your next question line open.

from Desjardins We'll Poirier go Capital next Benoit to Markets.

very cross-border Yes. much, great activity we've level. this been Thank and you at good topical Obviously, Mexico, in year. a When labor volume the evening, look have everyone. issues we seen very

lost. to there that the wondering So with RTM I was by to been got election? QX that John, impacted during U.S. quantify able issues in any And also, respect whether about demand X% you've was labor pull forward

network? was get volume to about the wondering to just see this whether back maybe and So with retailer the you I about discussion the opportunity shippers recover latest opportunity on

in fair of ahead a of of just in our do not saw July A but August that couple labor our but pull maybe amount on of comments North-South we there. and August. forward, -- believe product, I ahead stoppage

it's think I normalized. Now

October to the Domestic customer As to related our strike. see bit now going X% continue into where actually, year. we think that volumes, and The close optimistically of that we're seen the RTMs I our on a little feedback and in the volumes Intermodal an be that we've I move said, front, to out lift up to seems transload

got of opportunities record potash think when coal, business news our And QX, for demand for the in coal we was grain, the old demand like I of we've is that, record business. in say forward. It that good roll products, will QX. I that part the bulk was reason got simply

so it Part is that not of lost. roll it's forward,

Intermodal I in we that, certainly, of but a we've out system I as itself seen actually lost some in pickup kind bit little in Now volume. think washed said, Domestic of that's the And that already.

that I out -- days. just for the strong. was over close -- to of year don't I'm plenty So impact there concerns the have not not any freight those I'm us

time. And out Thank we you. run have of

I will Mr. back to now the turn So Creel. call over Keith

and sitting be a Thank you. this line outpacing definitely the continue Listen, efficiently. the we you've to growth. time afternoon bottom appreciate and in macro, to discussing our it with at industry's I us importantly, unique story the hope the bringing very CPKC, spite agree I Most value-creating results. would you safely of what heard

continue our a and premium network convert created fourth in industry growth will our creating for team new quarter shareholders. opportunities Stay Thank you. with has We to for value our it, parallel and this unique tuned results. in

wonder day. a please that have And today's you. your concludes We appreciate Thank participation, conference. and