Newspaper article The Canadian Press

Canadian Pacific Railway Execs Brush off Threat of 'Amazon Effect'

Newspaper article The Canadian Press

Canadian Pacific Railway Execs Brush off Threat of 'Amazon Effect'

Article excerpt

CP Railway execs brush off 'Amazon effect'

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Looking forward to what they are calling a record-setting third quarter, executives at Canadian Pacific Railway Ltd. said the "Amazon effect" poses no threat to the company and raised its full-year financial guidance amid a strong outlook for the remainder of the year.

"Some consumers want to buy [products] from Amazon, some want to buy it from Home Depot," said CP vice-president Jonathan Wahba.

"We have the courier base, and we have the big box stores...We're not concerned about the shift in consumer behaviour, because we believe it's going to come through us either way," he added, referring to what he called the "Amazon effect."

Amazon handled roughly 44 per cent of all American e-commerce sales last year, contributing to total sales of US$177.9 billion, or about four per cent of all U.S. retail sales, according to e-commerce analytics firm One Click Retail. The online retail giant is expected to rake in about half of all revenue from internet purchases in 2018.

Amazon relies on a network of delivery services to handle its shipments, but its fleet of trucks and airplanes is growing. In June, it announced a new program to spur people to start their own businesses delivering packages for the company, threatening to sidestep major couriers.

Wahba and CP chief executive Keith Creel stressed higher efficiency through algorithm-based scheduling, which they said has shored up business from delivery companies such as Purolator Inc. and United Parcel Service.

"We've reinvented ourselves at this company. And it's based on a model of precision-scheduled railroading," Creel told investors at CP headquarters in Calgary on Thursday. …

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