It’s certainly not going to come at a good time for the country of Canada. But as I’ve told our customers and as I’ve told the government and I’ve told our employees, if we’re going to have a strike, the uncertainty of that in and of itself is damaging. For it to be prolonged, for it to occur, it must occur later in the year when we have a harvest coming in when the demands for our service and the needs of the country have never been greater that is the absolute worst time for it to occur. So it’s unfortunate as it is, I believe. From a very realistic view given my experience having been at that negotiating table many, many times and I’ll be at it again this time. That’s how serious this is. I’m hopeful and I hope that we can avoid it, but this railroad will be prepared in the event that we can’t because we will not do a bad deal.
We’ve got to balance the needs of our shareholders, the balance of our customers and the balance of our fellow employees, not just the TCRC that we have negotiated with and came to negotiated agreements historically. Just unfortunately, we haven’t been able to get there with this group. And again, I’m hoping with strong leadership that can change. I’ll remain optimistic, but it just hasn’t happened yet.
Operator: Your next question comes from Walter Spracklin with RBC Capital Markets.
Walter Spracklin: I wanted to go back to your volume guidance. When I look at, what’s happening in Vancouver, obviously, a surge of containers coming into that port, you’re poised to benefit significantly from that. John, you mentioned Mexico. The Lazaro Cardenas up 40%. That’s not a small number. It’s catching its stride. Macro trends, you know, in your prepared remarks, you indicated Q1 came in better than you expected and think many would say we’re perhaps in from a macro perspective and a little bit better outlook for here in April going into May than we were in January. So just curious, when you look at your low single digit volume guidance and so many kind of inflecting positive macro but also more importantly company specific opportunity. Just curious as to where you frame that low single digit? Is it just kind of just being overly conservative, or do you see upside to that guidance here for 2024?
Keith Creel: Walter, you made some very good observations and I think I’d frame it up as being responsibly conservative. There’s some uncertainties out there. Certainly, we’re in a good place. The network is running well, the demand is there, the synergies are coming, the new markets are being developed. We have a very unique story and a very unique opportunity. But we also have a responsibility to look ahead. We’ve got a potential winning strike. I don’t yet know what the macro is going to do the second half. We’ve got some assumptions in that which are conservative assumptions. So if it does better than what we assume then sure there’s some upside. If the strike isn’t as long as what we might think it’d be or if we don’t have a strike at all then sure we’ve got some upside.
Do we have a normal grain harvest? Is it a bumper crop or do we have again a situation where we face a potential drought? Those are the levers that we’re really looking at. And once those become clear, then I’d be in a position to responsibly tell you, yes, we have upside. And I guess I’ll just close saying, we’re in a good place. We’ve worked hard to get to this place. This team is prepared for any of those outcomes we’ve talked about. And in the end, come this summer, come the end of Q2, I think we’ll be in a better position to tell you, yes, Walter, what you’re seeing the potential of that is true. It’s exciting. And until then, we’re going to stay responsibly conservative and make sure we do our jobs and prepare for these challenges we have ahead of us and come out in a very, very strong position on the other side.
Responsibly conservative is good.
Operator: Your next question comes from Fadi Chamoun with BMO Capital Markets.
Fadi Chamoun: Maybe just one follow-up question on the volume. In the second quarter, I mean, we’re starting off strong. I’m thinking grain potentially could wind down a little bit as we move into the quarter. Is there a way for you to kind of give us some gauge on what second quarter, kind of the right framework for Q2 volume? And really my main question on the pricing side, I mean pricing environment is quite good maybe unless you’re competing with truck in some markets. But what do you think now with a year into this merger about the service related pricing opportunity for CP? And is this something that will take time to kind of realize or are there triggered in terms of contract changes, renewals that you can kind of use to kind of drive a price improvement on the basis of the service level with your debt lower end?
Keith Creel: Let me, Fadi, I’m going to let John get into the color of the pricing. But let me tell you conceptually, when it comes to price at this company, we’re selling a valued service. It’s not a commodity. There’s value in it. There’s a value proposition for the customer. The level of service, the capacity we have on our railroad, the way we run the railroad, it’s worth something in markets because it allows the reliability for our customers to win in their marketplace. So that’s always going to be our story. It’s a value proposition. And as long as we do our job well, we never have to apologize providing a very unique and valuable service. On the volume side, we’re starting strong. This morning I looked at it, we’re up over 9% on an RTM basis and that’s really what matters the most not carloads, it’s RTMs. But again, looking at what’s ahead of potential strike, we’re modeling again in a very responsible conservative way for the quarter.
