MONTREAL — Short line and regional railways are playing a critical role in the growth of the entire industry in North America by maintaining a sharp customer focus in rapidly changing times, says the President of the Canadian Pacific Railway (CPR).
In a speech to the CPR’s annual short line and regional railway conference here today, Robert Ritchie told delegates that smaller railways are showing the way toward partnerships and other inter-railway arrangements that help improve business for themselves and their larger cousins.
“We need you,” Mr. Ritchie told his audience. “This synergistic relationship is what is driving a significant portion of the industry today.”
Flexible labour agreements, intense customer relationships, focused marketing and a respect for cost-containment were four characteristics which earned high praise from the CPR President.
Saying that under today’s regulatory regime the CPR cannot do business the same way, Mr. Ritchie urged short line and regional companies to join with the larger railways in pressing for changes to property and fuel taxation and revised policies which ensure competitors pay a fair rate to use public infrastructure.
The conference, which began Sunday and ends tomorrow, was the seventh held by the CPR. About 50 short line and regional railways participated along with the Railway Association of Canada and the American Short Line and Regional Railroad Association. Federal Transport Minister David Collenette also spoke to the group this morning.
Mr. Ritchie told the conference that since the CPR’s spin-off from the former Canadian Pacific Limited last fall, the company’s market capitalization has grown by more than 40 per cent.
He said traffic generated by short line and regional railways is responsible for a large measure of that success.
“You are CPR’s extended network,” he told the delegates. “Today the CPR forms the backbone of a network of more than 100 regional and short line railroads.”
CPR’s regional and short line-related freight revenues account for about 18 per cent of the CPR’s total freight revenues, and that portion is growing, said Mr. Ritchie. “Last year in a relatively flat market these revenues grew by 4 per cent while our total freight revenues grew by 1 per cent.”
In the last 10 years the CPR has transferred to regional and short line control about twice as much track as it has discontinued, he said.
The CPR is North America’s first purpose-built transcontinental railway. Its 22,500-km (14,000-mile) network serves the principal centres of Canada, from Montreal to Vancouver, as well as the U.S. Northeast and Midwest. CPR’s track provides a direct link between Chicago and the East and West coasts. Alliances with other carriers extend CPR’s market reach beyond its own network and into the major business centers of Mexico.