Investment in Lean Technology Powers CP’s Success

Despite unusual harsh winter conditions in parts of western North America and a weak valuation of its stock, Canadian Pacific is reporting if first-quarter profits to be far ahead of predictions. Founded in 1881, Canadian Pacific (CP) is one of Canada’s oldest railway companies.

Yesterday’s article in the Vancouver Sun quotes BMO Capital Markets analyst, Fadi Chamoun, “We believe the results also demonstrate that the company has begun to reap the benefits of recent investments in its infrastructure and lean initiatives.” According to the Vancouver Sun, “Chamoun estimated that CP’s operating ratio in the first quarter has improved to the 80-81% range from 90.6 per cent in the first quarter of 2011”.

Part of their commitment to infrastructure and lean initiatives involves the implementation of our Quadrant solution to streamline its InterModal operations (moving freight between trains and CP’s customers). CP benefits from Quadrant in two ways:

  • Save Costs – Rather than CP drivers waiting up to an hour to be dispatched, Quadrant’s In-Cab solution saves time and costs cumulatively over its hundreds of drivers by eliminating the need for mobile phone communication to dispatch drivers.
  • Increase Revenue – By using Quadrant’s geofencing features, CP has identified distribution centres with long stop times. Because CP has a contractual agreement with customers on the maximum amount of wait time at the distribution centre, CP tracks work with customers who are not meeting their contractual obligations and bills them accordingly for excess time.

By investing in its infrastructure and committing to lean initiatives, CP Rail is thriving even in the face of harsh markets and harsh winters.