Keith Creel, I think you all know, President and CEO. We have Ian Gray, who's VP Financial Planning and Accounting. Thanks so much for joining us. Always great to see you, appreciate your perspective. Keith, if you have any kind of initial comments, we can just dive into the fireside chat.
Yeah, I'd say at a high level, CPKC, we're two and a half years young now, still near infants in our value creating journey, culmination of two very established rail networks, the two smallest that came together to come still be the smallest rail world, but the most relevant rail world because we're the only one that connects all three nations. We brought the company together based on a vision of growth. In spite of this great recession we've been in since we came together two and a half years ago, we have leading up to and continue to lead the industry in growth. We've done that with the strength of not what the economy has given us, but the markets we've created, the markets we've connected with our synergies, with our self-help initiatives across a multitude of our books of business.
That said, this year we said that we're going to get to double-digit earnings. We see a path to doing that. We're going to finish the year strong with cost control. We're controlling what we can grow. We're proud to be a PSR railroad. I've been an advocate and ambassador of precision scheduled railroading for the last two decades. As long as our railroad, that's the way it's going to work because it works. It creates value, creates great service, controls costs, and drives a great safe outcome for our communities. All that said, we're positioned well to finish the year. Strength going into next year, I can't control the macro. I don't necessarily think it's going to change a lot, but I do think we're in a position of strength given the grain crop in Canada. We've got a record crop, average 73 million metric tons.
We're looking at 78-80 million metric tons of grain to move in the U.S. What was the dispute between China and the United States when it comes to soybean movements has been resolved. The Chinese are committed to buying 12 million metric tons. That product is starting to move, 25 million more next year. What's been a bit of a little headwind for us starting the quarter becomes a position of strength for us next year. Automotive, more of the same. Our single line service, our virtual loop network that we've created, growth year over year. We've increased and created records. We're going to continue to grow next year in the automotive space. Intermodal as well, international intermodal with our Gemini Cooperation and partnership continues to bode well for us. St.
John, next year is going to be an area of growth for us with additional traffic that's going to come to Saint John through that alliance. The final piece I'll speak with a lot of pride about is our domestic intermodal growth. Again, in spite of the macro, because of the markets we're connecting, Midwest, United States, Chicago, to Mexico, we're up 48% Year- over- Year. Continue, just had our strongest quarter in the third quarter, continued momentum into 2026 in that space. We are introducing the counterpart to the Mexican Midwest Express, which is the Southeast Mexican Express, in partnership with CSX over the Meridian Speedway. We announced this, if we go back to our investor day, that little niche acquisition of 52 miles of railroad between Meridian and Myrtlewood, Alabama, and then CSX taking back control of their railroad between Montgomery and Myrtlewood.
That link is connected. We've taken control. They've been investing money. We've invested money. I know Mike Porter was just here. He and I took a trip with Mark Redd and inspected the railroad from Meridian to Montgomery two months ago. With the infrastructure investments in the first quarter, that's going to be Class 4 track. The transit times between Atlanta and Meridian will be as well, if not better than the competitive alternative with the Norfolk Southern. You combine that with kind of the gateway across the speedway to Mexico and/or to Dallas, and it creates a compelling value proposition for it to continue to grow and take trucks off the road that are currently going to those markets into Mexico and out of Mexico from the Southeast as well as into the Dallas markets. We are positioned well.
The macro comes back, it's going to get very exciting.
Okay, great. You sound like you offered some kind of high-level comments, I think, that apply to 4Q. Any other thoughts about how the quarter is progressing in terms of volumes? Pretty close to what you expected is the cost side. It sounds like maybe that's something that can be even better. How do you think about those costs and volume in 4Q?
Yeah, I think the volumes are in track. We were a little bit down in October. We were 5% up in November, and we're up a little bit, continuing to gain momentum into December. That kind of brings us to a place we say we're going to do four mid-single digit RTM growth for about 4.5% for the year now. That will only strengthen. I don't think it's going to get any weaker. From cost control, while we fell a little bit back on RTMs in October, our cost control exceeded our expectations in October. The railroad is running extremely fluid. We're controlling what we can control, pulling those levers that are part of a PSR railroad, running trains faster, more efficiently, more fluid, keep them on the rail.
You get to a place where you can have margin improvement this year in spite of the macro again. All those things bode well for closing as we've guided for 2025 and sets us up well to have a positive 2026 to continue that CAGR of double-digit earnings growth based on mid-single digit or better volume growth.
Okay, so on track for 4Q 2026. Maybe just run through again how we ought to high-level think about '26.
We'll give guidance in January, so I don't want to get ahead of myself, but I see a path to kind of replicate in spite of the macro what we've done this year. Mid-single digit RTM growth is kind of where I'm seeing things at this point. Again, we'll fine-tune that when it comes to our January guidance. The other thing you should assume is additional margin improvement. A point, point and a half of 2026 certainly should be expected.
I think if I go back to the third quarter call, I think you had some questions and looking back over the last couple of years, what's the right level of EPS growth? Is it more realistic to think 10% for you? I know the macro backdrop does matter, but is 10% a better kind of multi-year number, or is it maybe more what you talked about a couple of years ago at your analyst meeting? It's more like a 15% number. Or maybe it's kind of partway between.
Let's go back to what the assumptions were, and I think that kind of answers your question. When we did our multi-year guidance and our plan through 2028, kind of the pieces were 3%-4% organic, 3%-4% price, and 2%-3% synergies. Obviously, the macro is a reflection of the organic. We haven't had the 3%-4%. It's been around 1%. We've overachieved on price. We're pricing north of the 3%-4% based on the value of the service. Again, we've done that in 2025. We're going to do it again in 2026. On the synergy side, we said we were going to get to $1.5 billion in revenue synergies by 28. We're going to be close to that by the end of 2026.
Again, because of the uniqueness of this network, because of these markets that we're creating, we're able to achieve our double digit. You layer the macro back on, if you get that additional 2%-3%, then you're going to get back to that 15% or better figure when it comes to EPS. We're at the lower range because of the economy. We're at the lower range because of the tariff impacts. Again, in spite of all that, we're still producing, we're still growing, and we're still double digits, which is a unique value story in this industry.
The synergy number you think you get to by end of '26 is what?
Revenue synergies.
Like 1.
I'd say 1.4.
1.4 is kind of reasonable.
Yeah, we'll be $1.1 billion this year. Exit rate in 2025, and we see another $250 million-$300 million next year.
Okay. So it sounds like you feel pretty good about that mid-teens EPS, kind of 15%-ish type of earnings growth as a reasonable level for multi-year for CPKC.
Yes.
Okay. Let's see. If I take a shift gears a fair bit here and go to the changes in the industry backdrop, and then kind of I guess we'll go into the M&A stuff. One of the questions that comes up is you've got a great reputation, great track record as a CEO. Sometimes people will say, "Oh, well, what if Keith moved to run BN?" Or if you put some other companies together and you really need someone who's a super strong CEO, Keith would be a great fit.
How do you think about it? I mean, I feel like I've had interaction with you for a long time. My perception is you would have a lot of loyalty and commitment and you're a man of faith.
My perception is it'd probably be tough for you to leave CP, but how do you think about your commitment to CP on kind of a multi-year basis? How should we think about, "Oh yeah, Keith's a great leader. He could go run something else"?
I think you hit the key points. My commitment to this company and my commitment to this team, this is unlike any in the industry. We've been together for about 10 years. This journey led us to combining with the KCS. It was my vision, our vision realized as a team, my commitment to the company, it's my legacy. I'm going to finish the work that I started. We committed these synergies. We committed to our shareholders this return for trusting us enough to enter into this combination. There are some that have suggested there's a grant that I got back when I signed an extension to commit to leading the company through this acquisition and through this integration that I think vests in 2026. It's not a contract. I have no contract. I could leave today if I wanted to. I'm not here for the money.
I'm not here for that grant. I'm here because I'm committed to this company. I'm committed to this team, and I'm committed to this legacy being one that's created unparalleled value. Now, I'm not going to be the CEO forever. In fact, in 2017, I started thinking about my succession plan then, not having any idea about this transaction. I just think that's my responsibility. I don't think any one human, man, woman, are bigger than the company they lead and represent. At some point, I'm going to retire. It's not tomorrow. I intend to be on the stage if you'll have me back this time next year representing CPKC. When I do, our shareholders can understand and know it's because this team is ready to improve upon what we've created together.
It would be the season for me to step out of the way and let them do their jobs. It's not because I'm looking for greener grass in a different field. If I wanted to work somewhere else, I could have already gone to work somewhere else. I'm here because I want to be, not because I have to be.
Will we see you in five years here?
Talk to my wife. I can't answer that. I'm not going to commit that without her discussion.
Okay. We're welcome back every year. Okay. Great. That's helpful. Appreciate that honest, straightforward answer. Let's see. Ian, why don't I shift over to you, give you a chance to jump into the discussion here? How do you think about the CapEx spend, what CPKC has been spending the last couple of years, what they can be looking forward, and where is the money spent?
Sure. No, thanks for the invite. I'm grateful to be here to talk to the CPKC story because I think capital is going to be unique in 2026 as we start to pivot. We have a very disciplined, very rigorous approach to managing the capital book at CPKC, but we also want to be one that allows for flexibility. Keith talked about synergies coming on board earlier. He's talked in the past about not overselling our network. We've spent a lot on network capacity. We've twinned the Mexico Bridge. We've reconfigured Bensenville Yard. We've added a significant amount of sidings in that North-South corridor. Now we get to start to harvest some of that.
Part of the PSR approach to capital is you need the network in place in order to improve speeds and cycle times so that you do not need to spend on locomotives and rolling stock. As Mark and team really start to grind out the operational efficiencies associated with the new network configurations that he has, we will start to pivot towards a little bit on the locomotive side. We are purchasing 100 this year, which we are very excited to bring on. That helps from a reliability standpoint. That supports the service that we are trying to offer our customers. They are more efficient to run from a fuel and cost standpoint. They have been put to work in our 100 series on the Canadian side, which has been very beneficial.
As we start to pivot into 26, you'll see a step down in capital despite things like the locomotive purchase. We will find ourselves closer to align with what we guided to at our investor day at that $2.6 billion-$2.8 billion. We will provide more detail when we give our guidance at the beginning of 26.
Is that $2.6 billion-$2.8 billion like a rough multi-year framework, or would you say?
Yes. Yeah, that's what we're initially planning. Capital is a little bit higher in 25. Part of that's the impact from the Canadian dollar. Some of that's a little bit on the tariff side. From a long-term run rate, we're targeting that $2.6 billion-$2.8 billion range. That's really going to be helpful from a cash flow generation standpoint. We did do a pause on shareholder returns as part of the merger. We're grateful for the patience of our investors. We've relooked at the dividend. We'll continue to increase the payout ratio there. Part of 26 guidance, we'll have some more commentary on what we're going to do from a shareholder buyback.
What is your level of buyback you expect? How much do you expect to spend on buyback this year?
Yeah, I don't want to get in trouble with my boss, so I'll let Nadine speak to that in detail in Q1.
Okay. Fair enough. I guess overall, in terms of CapEx, can come down a bit, and some of that can probably flow to buyback, and some is dividend too.
Yeah, that'd be a reasonable way to look at it. We continuously, Chris is here, who runs our treasury. We've targeted that 20%-30% payout ratio for the dividend. We'll get there gradually over time. With the additional cash, the natural outlet is on the share buyback side. I'll let Nadine add more detail in Q1.
Okay. Great. Yeah. I think this was, I don't know, a year and a half ago, whatever, a bit ago, Chris was kind enough to do a tour for an investor group that we had in Chicago at the Bensenville Yard. It is just pretty fascinating to see the different elements of both the expanding of the car load and then the intermodal facility and the auto facility, all those pieces together. I know you had maybe an analogous investment in Dallas. Where are you at in terms of infrastructure that you add to the system that is really stimulative for growth?
Yeah, go ahead.
Yeah.
You have to pay for it, so I'll let you know the projects.
Going back to my earlier comments, just on a lot on the network, a lot on capacity. As part of the STB application, we committed to service levels and investment. As we have added all the sidings in the North-South, that provides a lot of growth opportunities, and that is where a lot of the synergies were. Same with the bridge in terms of getting the additional traffic from Mexico into the United States and vice versa. The network and the capacity side is in really good shape right now. Keith made comments about organic not being as good as we would like and some macro headwinds. As soon as that starts to turn, you are really going to see that operational leverage on our network side. We talked a little bit about the locomotives, so that will help from a capacity growth standpoint. We are looking at rolling stock.
The PSR approach to railroading is that we fully appreciate that when we buy assets, be they capacity or rolling stock or locomotives, these are multi-decade assets, right? We do not want a shiny object syndrome or flavor of the month in terms of deploying that capital. When Mark and his team get together, they are very focused on weights and lengths and speed. Part of that is from an expense reduction standpoint, but part of that too is from the faster they get, the longer and heavier trains they run, the less equipment that we need. Capacity can still be supported from that where it needs to be. We feel really good about the network. We feel really good about the equipment we have.
We feel that there's even future benefits that can be gained as we get multiple years under our feet on what this combined network looks like and can do.
Yeah. Tom, I think what I would add to that is we're getting to a point now, the infrastructure, the hard infrastructure to realize the growth that we see a path to, it's in play or in place. When it comes to the automotive compound, number one, that was a nominal investment in Dallas. I'd like to say in the out years, two years from now, we'll have a business case to expand it. It is essentially a little bit of rail and some asphalt. The facility's there. It's not a big needle mover when it comes to dollars and cents. The things where we're going to start to benefit from now are the investments of others' money that creates the stickiness to us and partnership with us, like Americold. That facility, it's a $140 million facility that Americold invested in on our land that opened in August.
That's one of many. There's one literally that's being planned deeper in Mexico that's going through the process that I'm hopeful we'll be able to make an announcement on sometime next year where, again, in partnership with Americold, we create this ecosystem. They invest. Our infrastructure is the backbone that allows them to reap the return for their investment to feed a market, literally feed a market that's been fed by truck forever. Same thing going on at Saint John. Our investment to get to Saint John has been matched by the investment at the Port of Saint John, by the port in partnership with the government, DP World, who operates the terminal, and now even Americold. I was there two weeks ago. They announced the facility in Americold. It's literally the superstructure of the building itself is built. They're starting to equip the inside.
That facility is going to be open on the dock where the ships discharge by the second quarter of next year. As you start to add these bookends where it's partnership investment, not just railroad investment, our land is our equity. It creates the stickiness and creates the ability to continue to drive this path of growth that we've got going forward.
Where do you think the largest synergy opportunities are looking forward and some of the related to some of the customer investments? Is it in chemicals? Is it more in a domestic intermodal or maybe it is automotive? Maybe it is cross the board?
Yeah, there's a story in each one. Again, automotive, continued expansion of that closed loop, converting short sea opportunities that are now going on short sea that we see an opportunity to come to the rail network, leveraging the connection over Meridian that didn't exist before with the CSX to get to markets there. That's a piece of it. You've got international intermodal with the Gemini that continues to grow for us. That's going to bring more growth to Saint John next year. It's continuing to ramp up and bring growth to us down at Lázaro Cárdenas in Mexico. Of course, uniquely what we're doing at Centerm with Gemini has brought additional growth to us in Vancouver. There's more there for that to continue.
The domestic piece, the growth that we've had with Chicago to Mexico is going to be replicated, I think, and surpass in 26 and 27 with CSX over this connection in Meridian, taking trucks off the road product going into Mexico. Again, levers in all those locations. The other one, the crisis has created this one that I never thought about that's accelerated. This tariff tribulation has created a dynamic between Canada and Mexico as they look to diversify their markets, not be wholly dependent on the United States. They're never going to decouple. The U.S. is always going to be Mexico's biggest and Canada's biggest. We uniquely enable a lot of that freight that moves.
To bridge our network and become a land bridge between LPGs and refined fuels that are produced in Alberta going to Mexican markets, this year alone, we've doubled essentially what we were doing. This year, the run rate's going to be almost $500,000,000 in new revenue that's been created by our network connecting Canada and Mexico. Mexico and Canada are getting closer in a way that they never would have before, I think, without the challenge of diversifying their marketplace. Again, we're going to be in the middle of that because we've got the rail network that connects those two markets.
Maybe if we can drill down a little bit, that $500 million in revenue that you see from connecting Canada to Mexico, that's kind of future opportunity or?
No, that's the runway. We're going to actually this year, I'd say it's just a little bit less than $500 million. It's $460 million-ish of new revenue.
That's been come on during 25?
Correct. That's an annualized rate. That's correct. And it's LPGs, plastics. It's coming out of Alberta. It's also grain product that's going to the flour mills in Mexico. We've had news now, I think year to date, we're mid-20s in grain trains that have come from Canadian soil that are going to Mexican mouths by way of our network. Last year, same time, I think we've moved three. This whole diversification play has created an appetite and a demand for new markets that we get to connect. It's extended the length of haul. That move out of Manitoba, Brandon, Manitoba, we moved a grain train that I actually introduced to the Prime Minister when we were together in Mexico six, eight weeks ago. That was a 3,200 mile length of haul. That's a lot of freight, a lot of tonnage moving, creating a lot of RTMs.
Yeah, it's compelling. It's something to get excited about.
Probably 50-hour business.
No. We're regulated. We're regulated in Canada.
Yeah, right. There you go.
It's good business. It's not that good. It's good business.
Yep. You like the long-haul business. Okay. If there are any questions in the room, please raise your hand, or you can use the QR code and send it in. I'll check the iPad too. Let's see. Wouldn't want to run too far down on time without an important question for you, Keith. I think you know what's coming. How are you thinking about the, yeah, I guess the filing that UP and NS are probably going to put into STB pretty soon here? What are some key things that you would look at to say, "Okay, enhanced competition, yeah, they met the bar," or, "Wow, they're falling really far short"? How do you think about how that theoretically could be done? Maybe how do you think about some of the challenges that are underappreciated by investors?
I remember just the tremendous amount of work and I'm sure stress and intense effort you put forth in your own acquisition. Maybe just some broader thoughts on UP and NS and what's happening there.
I'm going to start at a micro level with CPKC, and then I'm going to go to the industry level. At a micro level, number one, we're unique because we're North-South. We're not threatened by, I'm not afraid of, competing with. I don't lose any sleep over a proposed UPNS combination. I say that because of our geography and because of the fact that only 5% of our revenue flows to NS today. In a worst-case scenario, there's 5% you would argue that's at risk, but 70% of the 5% we originate. When you're the originating carrier, I think that gives you an ability to protect against a worst-case scenario. I'm going to think about, "Okay, if this deal does get approved," and I don't think it's a fait accompli. I do not.
I think people are grossly underestimating the complexity of what UP and NS are attempting to do and the regulatory path they're going to have to go through. I know myself, our facts were a lot less complex, a lot smaller scale, and it was a monumental undertaking and a different set of rules. These rules are untested. For me to tell you what it's going to take to say you've enhanced competition and you've served the public interest, I don't quite know yet. I know it's going to take a lot because this can't be undone if it's ever approved.
Right.
The gravity of this, and I'm going to break this down in very simple terms. Think about a world where if it gets approved and it triggers additional, and it very well might, industry consolidation, a world where you have two railroads, compare that to the airline industry. What if we only have two airlines? Jim likes to talk a lot about Chicago because Chicago matters to our industry immensely. If Chicago breaks, our industry breaks. I don't think any of us would argue that that know anything about running a railroad. History has shown that. I think that's true about an airline. Think about if you only have two railroads, if one of the two gets sick, what happens?
Let's go to O'Hare in the middle of winter today, and you've got American Airlines, you've got Delta, you've got United, and I got Southwest that's sitting in Midway. I've got four strong, healthy carriers. As a consumer, as a traveler, I can choose. If one gets in trouble, if O'Hare gets tied up, where do I go? I lived in Chicago. I got on the interstate. I went down 55 to Midway, and I flew on Southwest, and I got to where I needed to go. Think about a world where there's only two railroads or two airlines. If there was only a United and only a Delta, do you think they'd be operating Midway and be operating O'Hare? The likelihood is they'd go to O'Hare because that's the workhorse. If O'Hare breaks, what do you do? You've got a nation that's in gridlock.
It's the same for the railroad. This industry is so consolidated that if you get to a place where there's only two railroads and one of them gets sick, this nation is going to be on its knees from a commerce standpoint, from moving freight across our nation. History shows when there were many more of us, and I lived through this as a young operating officer when UP and SP first came together, they melted the industry down two times, not once, twice. It was a mess. The interconnectivity of a network, a nation's network that connects, you can't unwind that. When it gets gummed up, it spreads across the entire system. Same thing happened with CSX and NS with Conrail. Not the same scale, but still, it brought the industry to its knees. If they get this wrong, it brings the nation to its knees.
I think that's huge risk. Now, you're talking about a regulatory body that understands that. You're talking about an independent agency that dealt with our transaction in a very detailed way when it was simple. It truly was end-to-end. There was zero overlap. There were zero customers that lost options. We had the two smallest coming together. We didn't shift the balance, the scale, not even remotely close to the same complexity. They're going to take all that into account. They're going to take end-game scenarios into account. They're going to take potential end-game scenario when it comes to consolidation, downstream impacts into account. For those reasons, because of all that risk, I'm not a proponent of additional consolidation. I'm not. What's true for the industry, standalone, if it happens, this railroad's in a good place. We're not threatened by it. We can compete against it.
I can't protect us if they go into gridlock because of an integration miscue. When it comes to competition and growing and producing a return for our shareholders, I think we're good. If it gets approved, Tom, because of all those risks and because of that high standard of enhanced competition and serve the public interest, how can it be approved without significant concessions? If concessions exist, and I believe I'm 99.96% certain that if it gets approved, it's going to have to have significant concessions to meet those two tests, then we're net benefited from that. We're going to have markets open to us that today might be closed to us. There's going to be, in a world where for this to happen, there's going to have to be perhaps divestitures of lines. There's going to have to be trackage rights given.
There's going to be markets opened up. Could be zone switches. Could be a host of things. We really don't know yet until we see their application. To suggest or think that it's not going to have concessions, or to suggest or think that it's just going to be rubber-stamped by the White House who wants what's best for this nation, they want to make America great again, not make America fail again when it comes to freight transportation. Just because you have a face-worthy photo op opportunity to stand with the president, that's great and that's wonderful to scrapbook, but I don't think that gets, that's not a stamp of approval for a deal that has so much of an impact on this nation. I just don't think it is.
Your comments, you'd say that, and you know STB board members very well, you think there is a scenario where STB just says flat out, "No, can't do it. We reject it.
I think if the facts lead them to that, this STB will do exactly that. I think this is going to be a very data-driven, fact-based analysis. We'll see how complete UP's application is. I think just reading Jim says a lot. He said, "I think it's 4,000 pages." I would suggest by that alone, it's not adequate because ours was over 4,000 pages, and the complexity of ours pales in comparison to the complexity of theirs. Different size and scale, different set of rules. I think this STB is going to be very fact-based, data-driven. In the end, if it says approve it, they can serve those two tests by way of concessions and all the things that I've talked about or a mix of those things, then they will.
If it doesn't lead to that conclusion, I think they have the courage and they understand they can't get this wrong. This is their legacy. It's too important to get wrong. I think if the facts say no, they'll say no.
What would you want from a CPKC perspective if you could get something from this, right, the concessions? Would it be like, "Hey, give us some access to give us more efficiency in through Houston where you run over UP"? Would it be, "Give us access to some chemical plants"? I think that's something kind of investors would think of, a lot of captive chemical traffic on the UP. Are those kind of high-level types of things that you think are beneficial, or is it more like, "Hey, we'd really like a line segment"? What would be useful to CPKC?
Yeah, I think it's a mix of all those things, Tom. Obviously, we've started our own very robust review. We had a three-day session with the right players we put together two weeks ago. I sat in on the last day. We looked at Texas. We looked at Louisiana, and everything you talked about, those are some of the list. We've got a session going on today. I'm going to sit in on day three on Thursday, and we have multiple, several more leading up to being prepared for that application. It could be divestiture. It could be trackage rights. It could be market access, taking kind of opening up markets that aren't open to us today. Yes. There are other things that I'm really concerned about, and it's not market access. It's anti-competitive behavior.
UP, historically, if you look at the history, and I do, and if you're the regulator and they know, if you ask BNSF with the filing they just made this week, UP sometimes has a hard time of seeing the regulatory requirements the same way the regulator might or seeing their commitments that they've made in previous deals the same way their partners that were made to might. What I'm going to ask for is a means to ensure that anti-competitive behavior is held at bay. I don't quite yet know what that is yet, but rest assured in our application, it's going to be fulsome, and it's going to address that because, quite frankly, I know Jim. I know Jim well. I trust Jim. Jim's not going to be there forever. This decision is forever.
You could have a change in leadership, and they might see and read it a different way and impose it a different way, and you get to a problem where the regulator becomes a mechanism for constant disputes because of interpretations, and we'll have more regulatory action than we've ever had in this industry, more disputes than we've ever had in this industry. What I'm going to be asking for in a to-be-determined fashion is an ability for the regulator to have teeth and to essentially make sure that the assurances that are given, the concessions that are granted, are actually kept in all cases and all forms and not subject to interpretation.
It seems important, but also could be, I mean, I guess maybe it's you try to come up with things that are formulaic as opposed to, I don't know, to qualitative. What if we, so you framed the exposure with NS, that's helpful to contemplate what your risk might be. What about the idea that the combined UPNS would have greater customer reach, maybe greater market power, and Ferromex isn't going to run as well? I don't know. I would expect that you would run better than Ferromex in Mexico. Maybe with greater customer reach, they could capture some of the additional cross-border traffic, right, and US-Mexico traffic. Is that a legitimate risk to consider, or are there reasons that you think, "Hey, that's just really highly unlikely to be a potential point of friction"?
No. Listen, at the end of the day, I'm an advocate for extended length of haul, single-line service. If this is approved, UP and NS are going to be able to create that in some lanes. That's going to be tough to compete against. If they do their jobs, they should win the marketplace. I'm not saying that they won't win in some of those spaces. You talk about Ferromex competing against us, you're exactly right. You've introduced complexity because it's another railroad controlling your destiny, not yourself, which is not the case with us. Still, some of that's going to happen. What you got to think about in the calculus of all this, it's not all just the win. You got to think about what is going out the back door through concessions and what you've exposed yourself to.
Is that list of disynergies going to outweigh the synergies? UP has suggested $750 million, but they've also said they shouldn't give any. I think that's a light number of the potential outcome given concessions. I know my list is going to be close to that. I'm not going to suggest I'll get it all if they approve it, but I'm going to make a hard case for the things we do ask for. I'm just one railroad. I know Vinny has got his view. UP's got their view. I'm sure that Mark has his. They'll win some business, but they're going to have to compete in a way, and they're going to have to access, I think, through concessions.
Markets opened up that, again, you got to be careful that what's going out the back is going to be greater than what's coming in the front.
One of the, I guess we try to think of the various many effects that could take place. I think you've got a great partner that has orange boxes. It's not an international steamship company. So you've got Schneider that's been a really great partner for you and had good growth on your MMX and now into the Southeast. Do you think there's risk or you're concerned that they might end up getting pushed away from you because they would be mismatched, right? Hub Group's matched on UPNS, Schneider's on UP and CSX and CP. And so you'd think they might have to go kind of fully one way or another?
I can't speak for Mark and Schneider. I can say this about Mark and Schneider. They've been great partners, trusted partners. We've allowed them to grow in lanes where they've been able to compete against their primary competitor in their space in a way that would never have been possible. We've done it together. It's a carve-out from their partnership with UP. It's not covered in their UP partnership. I just don't see them in those lanes and in that space cut their nose off to spite their face. I think that particular lane, North-South, is going to be fine. Now, the question is, what happens East-West? Maybe. I don't know. At the end of the day, if they don't want to be strategic partners, their competitor would if they were to choose to take a different path.
There is an alternative if a mismatch does occur.
Yeah. If something goes differently, then you could, yeah.
We have an ability to pivot. At the end of the day, Schneider's going to do what's best for Schneider. I respect Mark immensely. I happen to think CPKC, in a world where UP and NS, if they get approved, North-South into Mexico, there's no better ride. There's no better product. It can't be replicated. UP can't do it. Ferromex can't do it. Only we can do it. We offer a unique value, compelling scenario there for Schneider that UP can't solve.
Right. Okay. Keith, we are out of time. Thanks so much for all your great insights. I always appreciate having you here. Ian, thanks for joining me as well. Yeah, great to see you.
Thank you, Tom.