Western Railroad Discussion > CP buying KCS for $25 billion.

https://www.bloomberg.com/news/articles/2021-03-21/canadian-pacific-to-buy-kansas-city-southern-for-25-billion-ft

Well another flag falls...

Adam

All the aerodynamics of a lead blimp!

Out 

Well the part of about STB approvals is incorrect  and here is a better article  as it will need to be approved by the STB and you can bet BNSF, UP and CN will have some issues with this one

https://www.ft.com/content/9d4c383a-b3ee-415d-beaf-3cc7a6dc5993

Will be interesting to see what comes of this next week.

Not only that, but with the KCSM operation, I'd imagine the Mexican government will get some sort of say in what happens in their country.

Having CN and CP controil the North/South corridor to the Gulf is not in our national interests.

Out 

Interesting dichotomy for the current admin since they just canceled the Keystone.   

I think we'll see a lot more bids before this is over.

cctgm Wrote:
-------------------------------------------------------
> Well the part of about STB approvals is incorrect
>  and here is a better article  as it will need
> to be approved by the STB and you can bet BNSF, UP
> and CN will have some issues with this one
>
> https://www.ft.com/content/9d4c383a-b3ee-415d-beaf
> -3cc7a6dc5993
>
> Will be interesting to see what comes of this next
> week.

I'm sure the DOJ will be involved too along the regulators in both Canada and Mexico too. This could get really messy really fast.

Make the entire rail network a pay as you go and trackage rights for everyone. 

callum_out Wrote:
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> Having CN and CP controil the North/South corridor
> to the Gulf is not in our national interests.
>
> Out 

Out of curiosity, what sort of damage to the nation can they do if they somehow decided to spite the assets for which they've paid fortunes?   It's not as if they're going to pack up KCS or the former IC and move them to New Brunswick; even if they miraculously did, the Mississippi River will still be capable of carrying barge traffic.   And I'm not sure what the Canadians can do to damage the rail industry that's worse than what UP management is achieving.

Hopefully those 300 mainline switches CP bragged about taking out on their own railroad will pay for the conquest.

Hmmmm. While obviously not the UP but this would create a very friendly interchange partner for UP to essentially control the US-Mexico rail traffic via both Ferromex and CP. Not sure BNSF or CN will like this deal.

....unless this triggers the final round of "Megamergers" and BNSF and CN join hands...  ×   

I thought the STB or someone made a rueling that a railroad that operates in Canada cannot merge with a railroad that operates in Mexico. IIRC, that came out of the attempted merger of KCS and CN back in 2005. Can someone correct me if I'm wrong?

Ducks are lining up.  KCS+CP balances ICG+CN.  Mega-Mergers - UP + CSX + CP/KCS and BNSF + NS + CN/ICG to follow.

With autonomous trucks around the corner, universal trackage rights deserves serious consideration.  An argument has been made by others that the industry should consider what partial deregulation has done in the electric utility industry.  Some companies own only wire (tracks) and no power plants (locomotives & cars).  Power plants pay wheelage (car miles) to deliver electrons to customers.  With a guaranteed return of 15% on the wire net, there is plenty of incentive to maintain and improve the grid.

Currently, 98% of all rail freight profits worldwide are generated in North America, according to a speaker at the last Lexington Group meeting.  That is being done by concentrating on ever longer trains and a reduction in local service, aka loose car railroading.  IMO, there is an underserved market for shortline operations with one man crews that aggregate cars into unit train blocks and/or provide industrial switching.  Been there and done that.

George Huff, prairie prognosticator and retired railroader


 


   



Edited 1 time(s). Last edit at 03/21/21 09:39 by dsrc512.

I think that there are serious implications here that go beyond just the railroad industry.  A major one is that the merger would make a seamless one-railroad connection for Canadian crude oil to move to Mexico--Mexico is no longer a net exporter of oil, but an importer--leaving the U.S. with all of the hazards of trainloads of crude oil running through the country, with none of the oil benefiting the United States. Similarly, it would allow a one-railroad connection for Canadian grain to move to Mexico--Mexico is a net grain importer--or to Mexican ports, in direct competition with U.S. grain exports to Mexico.  It does make one wonder about why the Canadians seem to understand the strategic value of railroad infrastructure--a concept seemingly lost on most of the U.S. public and politicians.  Also, this would probably mean that a Canadian railroad, not an American railroad, would control the railroad paralleling the Panama Canal.  Throw in the international political intrigue that imperialist Communist China is working hard to influence and dominate the politics of Mexico and Canada (and the U.S., for that matter) and things start looking even more ominous.

I think you may actually be referring to the merger that was proposed between CN and BNSF back in 2000.

STB indicated at that time that future mergers between large Class 1’s would have to lay out the possible negative impacts on rail to rail competition and the remedies proposed to address those impacts.

I can’t recollect if KCS was specifically exempted from this because of their being the smallest of the Class 1’s but, CP is one of the largest now so I’m not sure the “exclusion” contemplated 21 years ago would still be applicable.

CW

SD80MACfan Wrote:
-------------------------------------------------------
> I thought the STB or someone made a rueling that a
> railroad that operates in Canada cannot merge with
> a railroad that operates in Mexico. IIRC, that
> came out of the attempted merger of KCS and CN
> back in 2005. Can someone correct me if I'm wrong?

Posted from iPhone

Where are the limits to xenophobia and protectionism?

Should we have been complaining that "KCS in Mississippi shouldn't be owned by yankees in Missouri"?
What about "the railroad in my county should be owned in my county!"
Does anyone still think FW&D and C&S should join at Texline, TX, lest outsiders control the fate of the Texas economy? 

dsrc512 Wrote:
-------------------------------------------------------
> Currently, 98% of all rail freight profits
> worldwide are generated in North America,
> according to a speaker at the last Lexington Group
> meeting.

IF that is true, IMHO, that is greatly or solely due to the fact that here in the US, rail infrastructure is privately owned for the vast majority of track miles.