• MERGER ANNOUNCEMENT: Canadian Pacific buys out KC Southern

  • Discussion relating to the past and present operations of CPR. Official web site can be found here: CPR.CA.
Discussion relating to the past and present operations of CPR. Official web site can be found here: CPR.CA.

Moderators: Komachi, Ken V

  by John_Perkowski
 
I am amused that so many are worried about the name.

My concerns are CPs movement of oil to the Gulf ports in lieu of a pipeline.

The increase in volume of rail traffic here in Kansas City.

The impact on US rail employment, especially since KCS is headquartered here in Kansas City.
  by justalurker66
 
Will eliminating the hand off between CP and KCS at Kansas City make a huge difference in their traffic levels? What is stopping a train from running through today that will be changed when the merger is complete? Is traffic taking other routes between CP locations and KCS locations that will be abandoned or used less when there is a CPKC railroad?

The overhead costs (two US HQ locations becoming one) seems to be the biggest change. I'm missing why the merger would cause a huge increase in traffic.
  by John_Perkowski
 
I think yes. It will give CP direct access to the Port of Shreveport. No more trackage rights, no more following BNSF train size rules.
  by justalurker66
 
So the current issue is a lack of an agreement for KCS to run such a train to/from Shreveport to connect to CP? Or does the current situation make using BNSF for the connection a better option (despite the limits)?
  by JayBee
 
John_Perkowski wrote: Wed Mar 31, 2021 10:21 am I think yes. It will give CP direct access to the Port of Shreveport. No more trackage rights, no more following BNSF train size rules.
Port of Shreveport? Rather Port of Port Arthur and Port of Houston (through PTRA). Additional Oil Trains from Canada due to start Summer 2021 when the unloading facility is complete at Port Arthur, TX.
Last edited by JayBee on Wed Mar 31, 2021 4:43 pm, edited 1 time in total.
  by Shortline614
 
G&W has sent in a support statement for the CPKC merger: https://dcms-external.s3.amazonaws.com/ ... 301857.pdf

More importantly, CP have collected 259 support statements from various entities, ports, railroads, and shippers: https://dcms-external.s3.amazonaws.com/ ... 301859.pdf

Some big names in there such as Nestle, Hyundai, Hapag-Lloyd, and Watco. However, most of these shippers seem to be on the smaller side? Am I incorrect?
  by Gilbert B Norman
 
For subscribers, TRAINS Newswire continues the support of the CP-KCS combination.

Fair Use:
WASHINGTON — Several trade associations, a major agricultural shipper, and Norfolk Southern today asked the Surface Transportation Board to review Canadian Pacific’s proposed acquisition of Kansas City Southern under the more stringent 2001 merger rules.

CP and KCS have said they would seek to have the merger reviewed under the old rules, although executives contend that the end-to-end combination of the two smallest Class I systems would be approved under the current rules because it would boost railroad competition.

Major service disruptions after the wave of mergers in the 1990s soured shippers on additional consolidation in the rail industry. Those mergers — including Union Pacific-Southern Pacific, Burlington Northern-Santa Fe, and the split of Conrail between CSX Transportation and Norfolk Southern — prompted the STB in 2001 to impose much tougher merger review rules.
In the report, Bill Stephens recalls the service disruptions that occurred resulting from the SP-UP and BN-ATSF mergers. I would think that being an end-to-end combination, any disruptions would be limited to the KC gateway where the traffic consigned to points East could potentially "flood my MILW" and even "The Harbor", as "new management" seeks the most favorable for themselves.

Somehow, I foresee Surfboard imposed conditions requiring KC to be maintained as an "open gateway", enabling shippers to route traffic as they choose (Shipper's Routing). Pretty sure that the BNSF and NS Traffic - whoops Marketing in newspeak - Departments will have "boots on the ground" (and three martini expense accounts) to "educate" shippers that they ultimately decide how their traffic will be routed - and not a CP-KCS traffic salesman.
  by Shortline614
 
Asisde from the normal New York Dock conditions applied to every merger, keeping open the Kansas City, St. Louis, and New Orleans gateways are the only conditions I see the Surf Board putting on CPKC. Such a condition would be a throwback to the "DT&I Conditions," where a merged railroad would have to keep open all gateways that existed prior to the merger. In a pre-Staggers world, the DT&I Conditions were a liability. Railroads were forced to operate lines with little to no traffic to serve hundreds of gateways few shippers used. The condidtions where abolished after deregulation however, I wonder if they could make a comeback. A modern version of the DT&I conditions might be seen as a way to protect shippers routings in the event of Class I megamergers. We are down to about two dozen interchange points between major railroads, and they work quite well, Chicago nonwithstanding. It also might be the first step towards open acess here in the United States.

There is some more news. The deadline for groups to challenge KCS's exemption from the post-2001 Class I merger rules was yesterday. From Trains Magazine:
WASHINGTON — Several trade associations, a major agricultural shipper, and Norfolk Southern today asked the Surface Transportation Board to review Canadian Pacific’s proposed acquisition of Kansas City Southern under the more stringent 2001 merger rules.
https://www.trains.com/trn/news-reviews ... ent-rules/

Here is a link to Norfolk Southern's letter: https://dcms-external.s3.amazonaws.com/ ... 301866.pdf

NS wants the CPKC deal to be considered by the current Class I merger rules. Interestingly, NS does not take any position on the merger itself. Strange, considering NS and KCS jointly own the Meridian Speedway line in the Southeast. Norfolk Southern and Canadian Pacific have been close partners in the Northeast for going on 20 years. So NS would not have any big issues with CP steping into KCS's role on the Speedway. NS continues to be a company that both fascinates and confuses me.

As I complete this post, BNSF sent their own letter to the STB, echoing what NS said in their letter. The CPKC deal should be considered by the current rules. No offical position taken on the merger though. https://dcms-external.s3.amazonaws.com/ ... 301876.pdf

Going back though the STB filing, UP and CN have also sent letters in saying the CPKC deal should be considered by the current rules.

CN: https://dcms-external.s3.amazonaws.com/ ... 301874.pdf
UP: https://dcms-external.s3.amazonaws.com/ ... 301871.pdf

Now CSX gets in on the action. Saying they don't care either way. https://dcms-external.s3.amazonaws.com/ ... 301873.pdf
  by Shortline614
 
More shippers come out in favor of the merger. The count is now up to 300.

From Trains Magazine:
Canadian Pacific and Kansas City Southern says 45 more customers, ports, and other entities have filed statements with the Surface Transportation Board supporting their planned merger, bringing the number supporting the proposal to more than 300.
https://www.trains.com/trn/news-reviews ... or-merger/

Link to the press release: https://www.cpr.ca/en/media/cp-kcs-rece ... il-network

Link to the STB filing: https://dcms-external.s3.amazonaws.com/ ... 301895.pdf
  by John_Perkowski
 
Norfolk Southerns western terminus is the old Wabash yard in north Kansas City.

BNSF and UP are the powerhouse roads in KC. BNSF serves Houston on its own rails. UP serves on an amalgamation of MoPac and SP rails.

This merger creates another direct route to the ports.
  by eolesen
 
If you're calling out Mopac and SP, then technically, BNSF is accessing Houston on the Fort Worth and Denver, no? ;)

Sent from my SM-G981U using Tapatalk

  by JayBee
 
eolesen wrote: Wed Apr 07, 2021 1:38 pm If you're calling out Mopac and SP, then technically, BNSF is accessing Houston on the Fort Worth and Denver, no? ;)
I think he is making a subtle distinction between UP, which acquired SP and MP, and BNSF, which was a merger where neither predecessor survived in name, but both had access to Houston before the merger.
  by Gilbert B Norman
 
Of interest will be to what extent will a merged CP-KCS be interested in rebuilding the MILW La Crescent-Davenport "River" line?

Suffice to say, when I "pulled the pin" at the MILW end of '81, that line was one "slow order" atop another. Only local traffic used it; what Twin Cities-KC business had was routed through Chicago, thence West on the D&I (latter day post-'55 route of "The Cities") to Sabula. Since then, the line has gone through two successive Short Line ownerships, including first conveyance to the SOO along with anything of the MILW that mattered, two Short Lines, and finally reacquired by the SOO (dba CP).

I have no idea what FRA Class the line is today, but I'll throw a dart and it lands on Class 2 (25mph).

I would think that a combined SOO(CP)-KCS will have much more traffic to handle Twin Cities-Kansas City than SOO enjoys today, and in turn would be looking at least at Class 3 (40mph), and even Class 4(60). True, the RI-CNW-UP (route of the "Twin Star Rocket") christened the "Spine Line" by some consultants "overrunning CUS" post-Bankruptcy, is the most direct route, but rehabbing the River Line would be a step in the right direction for SOO-KCS.

Finally, what I find hard to believe is how the passenger train advocacy community thinks less traffic through Chicago, more slots for passenger trains; and "the Topper"; might a SOO-KCS merger precondition be reinstating the KC-NO "Southern Belle"? KCS was "out" well before A-Day lest we forget.