Digital Upheaval at CPKC: Harmonization with Obstacles

The merger of Canadian Pacific and Kansas City Southern went smoothly until the end, but the comprehensive change of the IT system in former KCS areas of the USA caused initial turbulence last month. Mark Redd, Chief Operating Officer at CPKC, describes how the transition to the new operating system caused local service issues in Louisiana, East Texas, and parts of Mississippi, with regional freight traffic being particularly affected. Issues with operational functions led to transfer times at hubs like Shreveport skyrocketing from 35 to 68 hours. The Surface Transportation Board is stepping in to provide support and is in close contact with CPKC management to overcome the challenges. The National Industrial Transportation League reported members experiencing delays, forcing some companies to switch to truck transport. A chemical company expressed anonymously that even basic functions were temporarily unavailable, leading to significant delays. The CPKC board is now acting proactively on site to find solutions. In a bulletin on June 5, CPKC indicated further improvements. Analyst Rick Paterson from Loop Capital Markets emphasizes the challenges with such system conversions. However, CPKC CEO Keith Creel is optimistic: remaining issues are expected to be resolved shortly, allowing rail traffic to run smoothly again soon.