This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
November 2024
By Pat Foran, Editor-in-Chief
Keith Creel is a disciplined strategic thinker who sees the bigger picture, always, colleagues past and present say. A straight shooter, the president and CEO of Canadian Pacific Kansas City keeps his word; he does what he says he’ll do, colleagues and customers say. He exudes integrity and he’s humble, they add.
Renowned in rail circles for his operating acumen and knowing the true meaning of precision scheduled railroading (PSR) and how to implement it, as well as his focus on driving smart growth, Creel is a one-of-a-kind leader — or, as transportation analyst and Progressive Railroading columnist Tony Hatch describes him, a “unicorn.”
“Keith is truly doing PSR the way it was intended — to make a railroad more efficient and then pivot to growth,” says Hatch, program consultant for the annual RailTrends® conference. “He was the first to pivot and take his company in this direction. His leadership set the standard for what railroads are trying to do today.”
Creel’s standard-setting has been apparent for a couple decades. While he was CP’s president and chief operating officer, Progressive Railroading and RailTrends in 2014 presented Creel with the annual Railroad Innovator Award, which recognizes an individual’s outstanding achievement in the rail industry.
Since then, Creel has continued to keep innovation front and center. He’s fostered an environment at CP/CPKC that enables his team to forge partnerships, develop new products, drive efficiencies and put the railroad in better position to grow — particularly since the Surface Transportation Board blessed the CP-Kansas City Southern merger in March 2023.
“He’s always been disciplined, but he’s also constantly in that learning mode,” says Gordon Trafton, a CPKC board member who’s known Creel for nearly 30 years. “Even in today’s world, to see where he’s at, particularly with getting the KCS deal done, he’s ramped up to another level. It’s also fed his energy level in that he’s got something more to show, to deliver: to successfully bring these two railroads together.”
For these reasons, Creel will receive the Innovator award once again — the first to win it twice since the award’s 2009 inception — at RailTrends 2024, which will be held Nov. 14-15 at the New York Marriott Marquis in New York City.
Creel will accept the award on behalf of the CPKC team.
“I am blessed with the best team in the industry, no doubt about it,” he says. “It’s taken innovation — not only to survive, but to get to a point to thrive in order to be in the position to acquire the KCS. So, this is our story, not mine.”
Railroading may be the ultimate team sport, but Creel’s chapter in the still-evolving CP/CPKC story — along with his contributions to date to the North American rail lore — is a compelling narrative in itself.
Creel’s story begins in Anniston, Alabama, where he grew up in the late 1960s and early 1970s. Anniston is about halfway between Birmingham, Alabama, and Atlanta.
His first job? Sacking groceries at age 16. At the grocery store, Creel met a co-worker who’d “really impressed him.” The co-worker had just returned from boot camp.
“He told me about a program they had — if you got your parents to agree, you could sign up for it when you were 17,” Creel says.
So, in the summer of 1985, between his junior and senior high school years, Creel convinced his parents to allow him to serve. He figured the experience would help him “grow up a little,” help him “get a little bit ahead in life.” Creel signed up on his 17th birthday. Two weeks later, he was in boot camp in Fort Jackson, South Carolina.
A quick study who friends say is blessed with the ability to impress, Creel rose to the rank of lieutenant by the time he was 20. At 21, he began serving in the Persian Gulf War in Saudi Arabia. The experience led him to conclude he didn’t want to serve full time.
“The esprit de corps in the military, I loved,” says Creel, who in 1992 earned a Bachelor of Science degree in marketing from Jacksonville State University. “But it was the sacrifice I saw families go through, and the families I saw get torn apart. I just said in my head, ‘I’m not sure that that’s exactly what I want to put my family through.’ And then along came the railroad.”
Creel learned of an operating job at the Burlington Northern Railroad. In 1992, he signed on as an intermodal ramp manager in Birmingham.
“Like in the military, the esprit de corps, camaraderie and the leadership aspect [in rail] really resonated well with me,” says Creel, who entered a BN corporate management trainee program in 1993.
After serving as a terminal trainmaster in Tulsa, Oklahoma, and a division trainmaster in Wichita Falls, Texas, Creel left the BN in 1996, which was merging with the Santa Fe Railway, to join the Illinois Central as a terminal trainmaster in Memphis.
“You could tell he was very disciplined. That’s one word that would describe him,” says Trafton, who began his railroad career in 1978 with BN and joined the IC about the same time Creel did. “He’s very detail oriented. He gets to the root cause.”
On Creel’s first day at the IC, he met another disciplined, detail-oriented railroader: IC CEO Hunter Harrison.
“Hunter understood the business from top to bottom, and to survive with him, you had to learn the business,” Creel says. “If you did, he trusted you and respected you. If you tried to blow smoke up his tail, he’d fire you. And that kind of resonated with me — Southern roots, Southern values, do your job. If you do, you’ve got one; if you don’t, you don’t.”
With the legendary Harrison as a mentor, Creel quickly rose through IC’s — and after CN acquired the IC in 1999, CN’s – ranks. He served as VP of CN’s Prairie Division, VP of the Western Division, SVP of the Eastern Region and EVP before being promoted to COO in early 2010.
“Every year, year and a half, Hunter put me in the most troubled spots on the network,” Creel says. “That’s how I made my career, how I cut my teeth — being the fix-it guy.”
Creel did more than just fix things. He helped lay the foundation for CN’s future. Harrison, the master of scheduled railroading, considered Creel an operating expert and frequently cited him as the perfect example of what he was looking for in a leader.
“It was clear Hunter had a mission to prepare this person to become CEO,” says Trafton, who worked with Harrison for 30 of his 33 rail years.
As Creel’s star rose at CN, it also became clear that he’d developed his own ideas about leadership, as well as what it means, and takes, to lead.
“I’m very assertive; I’m very aggressive, but I’m a bit more tempered [than Harrison],” Creel says. “As the world has changed, taking the time to explain the why, and taking the time to let people have a bit of a voice, has become more important. ... Hunter was very command centric, He would teach through stories, ask tons of questions, but sometimes it could overwhelm people.”
Including Creel. At one early point in their mentor-mentee relationship, Creel says he was “so overwhelmed with the stress and the intensity” Harrison could bring that he contracted Bell’s palsy, a neurological disorder that causes temporary or permanent weakness or paralysis in the muscles on one side of the face.
“I finally realized I had to filter out his intensity and get to the message,” Creel says.
But Creel knew he couldn’t — and wouldn’t — manage or lead that way. “Not everybody can filter out that intensity,” he says. He found the leadership styles of two other mentors — Trafton and John McPherson, the IC’s SVP of operations in the late 1990s — to be especially instructive.
A master of the details, Trafton never raised his voice, Creel says.
“I learned, working for him, that disappointing him would hurt me more than anything else,” Creel says. “He treated you with respect, you knew that he cared about you. Seeing the way he carried himself, the way he commanded respect by that approach, gave me something to offset the way Hunter led.”
McPherson — “a gentleman who always made me feel like he cared about me,” Creel says — provided a different perspective, as well.
“You can’t demand somebody’s respect; you’ve got to earn their respect,” Creel says. “And the way you earn it is you treat them like a human being and let them know you care about them.”
In short: Good leaders need to be good teachers, Trafton says.
“You want to be able to pass on what you’ve learned to others, so they don’t have to try to get there completely on their own,” he says. “Keith is great at that, whether he’s spending time with people on the ground fixing track or with people figuring out how to do a merger deal.”
Adds Creel: “You can have high expectations, but you’ve got to make people feel like they’re part of something bigger than themselves. If you do that, 99 out of 100 people are going to rise to that challenge.”
Creel would get the chance to rise to a challenge of his own and test his leadership skills in a new context. In 2013, Harrison — who retired from CN in 2009 only to return to the industry three years later to serve as CP’s CEO — recruited him away from CN to serve as CP’s president and COO.
Creel’s initial charge: drive improvements and operational performance at a railroad that previously had been managed more from a marketing perspective, but arguably hadn’t properly invested capital to improve service.
“When I came to CP, I told Hunter — just like he had as operating chief at CN — I wanted marketing reporting to me. That’s the only way I was coming,” Creel says. “Because I saw the damage that occurred after Hunter left CN and marketing went back to the CEO. I told him, ‘I know what the product is, I’ll make sure we don’t get oversubscribed, we’ll build it, they’ll sell it.’ And he gave me the reins to do that.”
Over the next few years, Creel and the CP team built, sold and didn’t oversubscribe; they did what Creel said they’d do. CP’s operational and financial performance began to improve. And when Harrison left CP to pursue the CEO post at CSX in 2017, Creel was ready to take the reins at CP.
“We had a mandate to grow from the board,” Creel says.
Creel knew rival CN would continue to dominate in markets CP couldn’t reach, and CP couldn’t battle CN with the balance sheet, so CP would need to “play it straight” and “start creating and innovating.” One example: CP strategists began studying what it would take to build automotive business out of Vancouver.
“We had a footprint there,” Creel says. “Could we build an automotive terminal? I said, ‘Let’s build one, and build it quick.’”
Completed ahead of schedule and within the span of six months, CP’s Vancouver Automotive Compound opened in the spring of 2019. Built on 19 acres adjacent to CP’s Vancouver Intermodal Terminal, the compound allows for eastern Canadian car shipments to be quickly offloaded and for empty carriers to be reloaded and shipped back east. Other partnerships and new products helped drive growth in the years that followed. Along the way, the railroad took market share from CN and made money doing it, Creel says.
“One of the things I’m most proud of him for is his transition from an operations expert into a savvy strategic CEO,” says Dan Borgen, chairman, CEO and president of CPKC partner USD Group, which designs, develops, owns and manages large-scale multimodal logistics centers and energy-related infrastructure across North America. “He understands the importance of his team, and the importance of his customers. He understands PSR and how to do it – and how to continue the legacy of Hunter [Harrison] but do it in a much more elegant way.”
Accordingly, Creel has broad appeal in the financial community, says independent analyst Hatch.
“Looking at my stakeholders, he appeals to all sides,” Hatch says. “He’s the ‘Man for All Seasons.’”
While the CP team continued to step it up on the innovation front, and Creel continued to embrace his role with aplomb, he and other CP team members began wondering aloud if the incremental progress they’d been making was sustainable.
“I kept hearing from [Chief Marketing Officer] John Brooks, ‘Keith, how do we continue this? We need a bigger playing field. I’m origin rich and destination poor. I need a bigger network to really sell this model.’”
The only way CP could truly expand the network would be to merge with another railroad. Creel, who’d had his eye on KCS dating back to his CN days, discussed the viability of a CP-KCS combination at CP’s July 2020 board meeting. At the time, he thought the deal would be “too rich, too expensive.” He also thought there might be some execution risk involved in doing a deal at that time. While KCS had committed to implementing PSR, KCS hadn’t yet run the model through an economic cycle. “It’s easy to manage it when the cycle is going down to cut costs, but the art of PSR is making sure you can bring it back up the right way,” Creel says.
Creel also acknowledged that CP-KCS, which would be an end-to-end combination, was almost certainly the only Class I merger that could be approved from a regulatory standpoint. A board member asked Creel if he thought the KCS purchase price would ever be any cheaper. “He also asked, ‘Keith, what if you’re wrong? What if somebody else buys them?’ Creel says. “Then he said: ‘What’s the harm in asking?’”
Creel agreed to reach out to KCS President and CEO Pat Ottensmeyer to float the CP-KCS idea. “We had lunch at the River Club in Kansas City and I put the idea on the table,” he says. “I told him I thought it made great sense for our customers, given both our networks’ reach. We’d both been disadvantaged, we’d been the little guy, we’d been kicked around, we’d been locked out of markets.”
Creel also told Ottensmeyer he wouldn’t be coming in with a “big bid” to buy KCS, and that he considered CP-KCS to be a “merger of equals.”
Ottensmeyer said he’d share Creel’s proposal with the KCS board. Two days later, Creel and his family left for a hiking trip. When the plane landed in Jackson Hole, Wyoming, his phone was blowing up. KCS’ stock price “had shot through the roof,” Creel says.
“There had always been a rumor that private equity was looking at the KCS,” he says.
Only it was no longer a rumor.
“It was pretty serendipitous, and I think destiny and fate, that we had that conversation on a Wednesday, and then private equity makes a move on Friday,” Creel says. “And that began a journey of us competing against private equity up until we made the [merger] announcement.”
On March 21, 2021, CP announced it had reached an agreement to acquire KCS. If approved by the STB, it would create the only single-line rail network in North America that connects Canada, the United States and Mexico. CPKC would be the only railroad that runs between the U.S. Northeast and Atlantic Canada to Texas and Mexico, and to the upper U.S. Midwest from Mexico, Texas and Louisiana. CPKC’s 20,000-mile network would reach some points no other Class I could match in terms of strategic port facility access and gateways with short lines and other large roads.
In the weeks that followed, Creel and Ottensmeyer spent a lot of time together, conducting town hall meetings, selling the deal – and developing a friendship and mutual respect.
“There was never any ego, Pat was always professional, he always carried himself like a gentleman,” Creel says. “You could speak candidly with him — you didn’t offend him. He, in turn, would speak candidly with you. We were excited because we felt, culturally, our two companies were a good fit.”
And then along came CN, which made its own bigger bid for KCS.
On May 21, 2021, KCS terminated the CP merger agreement and entered into a merger agreement with CN that featured a voting trust structure.
“I told Pat, ‘No offense, I’m not going to counter, we’re done. But I’m not giving up,” Creel says he told Ottensmeyer. “’I’ve got a different idea, a different approach. We’re not withdrawing our merger application from the STB. We’re going to run parallel to your merger agreement with the Canadian National. I don’t believe your deal can get approval, and ours can, and it’s my job to make sure that the truth is heard. And I believe if the truth is heard, the regulator is not going to approve your agreement.’”
Creel says Ottensmeyer told him he appreciated Creel’s honesty, but believed the CN-KCS deal would pass regulatory muster. It didn’t. On Aug. 31, 2021, STB rejected the use of a voting trust agreement in connection with the proposed combination between CN and KCS. A month later, CP-KCS reached a second merger agreement, the one the STB approved in March 2023. “The beauty of the long approval process is it gave us a lot of time to plan, a lot of time to think,” Creel says.
More recently, though, some of that time’s been spent thinking about the loss of a dear friend.
Pat Ottensmeyer, whose vision and leadership played a monumental role in the evolution of KCS, the CP-KCS combination and the rail industry, died on July 26. He was 67.
“He was just a genuine, salt-of-the-earth human being,” says Creel. “He told me from the very beginning, ‘I don’t want to do any [deal] that’s not transformational, and in the end, doesn’t bring significant value not only for our shareholders but also for our employees, and the communities we operate in and through, most specifically Kansas City.’ His values and my values as humans resonated.”
Now, 18 months into the integration, the CP-KCS combination is on track to be transformational and to bring significant value, Creel believes.
“With all that preparation, and the team that we have, we’ve kept our commitments to the regulators, we kept our commitments to the customers,” he says. “And it’s allowed us to innovate on the market side and work with customers. We don’t have irritated customers; we have pleased customers. And we have new customers.”
And new markets. CPKC is serving niches that never would have been possible without this extended, single-line network, Creel says, citing the following examples:
CPKC also continues to develop its closed-loop automotive supply chain, where parts and finished vehicles can move across the United States, Canada and Mexico.
“When I worked at Canadian National, I remember getting my teeth kicked in by the GMs and Fords of the world because we didn’t have car supply for the finished vehicles they had coming off their assembly lines, and they were putting them in a parking lot,” Creel says. “I knew then and I said then that if we could ever create origin and destination, and control the cars on our own network, and create our own empties supply, that had to have value to the automotive supply chain.”
The post-pandemic “meltdown” in 2022-23, which did a number on car supply, gave CPKC “the perfect venue to have conversations with the major OEMs,” Creel says.
“We said, ‘Listen, we can help you solve the problem by creating this closed-loop system,’” he says. “That’s allowed us to accelerate that narrative.”
It’s a refreshing narrative, the kind that customers and partners value. “He does what he does with such integrity and honesty,” says USD Group’s Borgen, who met Creel while he was the operating chief at CN and considers him a close friend. “With Keith, you feel like you really have a partner in the business, someone who gets it, someone who will listen and help create solutions.”
Creating solutions in concert with customers is key for CPKC — and the rail industry. “We’ve got to protect our reputation,” Creel says, meaning Team CPKC needs to consistently demonstrate that it recognizes its post-combination obligation to serve its customers and employees, and the three countries it links. “Over the next five and a half years of STB oversight, everything we said in that application, we’re going to get it done.”
To Creel, CPKC has a blank canvas upon which to create.
“Quite frankly, this is something that’s never happened before,” he says. “We’re the only rail network that can compete against, and partner with, all the other Class Is. That’s only true for us. We’ve got an ability to take trucks off the road with these products we’re creating.”
And opportunities abound.
“What I know about opportunities is when you start to create them, people start to come out of the woodwork. They’ll come to you, just like they have in the automotive space,” Creel says. “There are some customers we’re talking to today that we’ve never had a commercial relationship with. And what they’re talking to us about is not on rail — it’s on sea. They’ve never had a reliable enough supply chain that they’d risk taking off sea and putting it back on the rail.”
For CPKC, it’s never been more crucial to be entrepreneurial, to keep innovating and to stay hungry, Creel says.
“It is the way we need to remind ourselves to remain wired in uniquely connecting our ability to run a scheduled railroad and understanding that you can’t oversubscribe it – and going slow and building this thing out is a recipe for great success,” he says. “Over the next decade, this railroad is going to be in a position to grow like no other, and to create value for all stakeholders — employees, shareholders, safety, community, all those spaces — as long as we protect that recipe.”
Count on Creel to cradle it. For as long as it needs cradling.
“We’re in a very unique position. We know that it comes with great responsibility, and we intend to optimize it,” Creel says.
And as long as he has anything to say about it, CPKC will optimize it, he adds.
“Rest assured, I’m not leaving until I feel comfortable that the people that follow me will not only continue to sustain but build upon and do better than what I’ve done,” Creel says. “That’s what legacy is all about and that’s what leadership is all about.”
Creel says nothing would make him prouder to see CPKC perform than it ever will under his watch. He believes he’s got the team and network for that to happen.
For now, Creel’s colleagues, partners and fans are glad he intends to keep protecting the recipe for the foreseeable future.
“There isn’t anybody who really compares, CEO wise,” Trafton says. “It takes someone very special to lead this railroad. Fortunately, he happens to be at CPKC.”
Email questions or comments to pat.foran@tradepress.com.
Related Topics: