Western Railroad Discussion > BNSF and NS have announced their Gift List for CPKC merger

https://www.trains.com/trn/news-reviews/news-wire/bnsf-and-ns-may-seek-trackage-rights-over-kcs-as-part-of-cpkc-merger/#wait_approval

This is shaping up to be a very interesting railroad news year, with lots of juicy stories to debate.



Edited 1 time(s). Last edit at 01/13/22 12:13 by SOO6617.

And remember, just because they ask for it doesn't mean they're going to get it.

Fire up the popcorn machines.

They should!

PHall Wrote:
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> And remember, just because they ask for it doesn't
> mean they're going to get it.

Posted from iPhone

One more shoe has dropped. CN already made their request: https://www.trainorders.com/discussion/read.php?1,5399884
Now BNSF and NS have joined with theirs.
More to come? Will we hear from CSX and UP? The deadline is approaching. Stay tuned.

Oh yes, fire up the popcorn machine....

MC

UP would be most unhappy if BNSF gained direct access to Laredo. It will certainly make things interesting though.

UP wont be pleased if BNSF gains trackage rights to Shreveport from Dallas either.  UP has the most to lose in this merger.

Mexrail

Savanna to Clinton is kind of an oddball.  BNSF already serves Clinton via trackage rights over the CP coming up the river from the Quad Cities.  I know BNSF has (or at least had) picked up quite a bit of grain/ethanol traffic from ADM in Clinton.  I wonder if they've got enough traffic going north out of Clinton onto the Chicago-Minneapolis main that they want a direct shot?

Just seems like an odd little connection to ask for unless they've got a specific use case in mind.

NDHolmes Wrote:
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> Savanna to Clinton is kind of an oddball.  BNSF
> already serves Clinton via trackage rights over
> the CP coming up the river from the Quad Cities. 
> I know BNSF has (or at least had) picked up quite
> a bit of grain/ethanol traffic from ADM in
> Clinton.  I wonder if they've got enough traffic
> going north out of Clinton onto the
> Chicago-Minneapolis main that they want a direct
> shot?
>
> Just seems like an odd little connection to ask
> for unless they've got a specific use case in
> mind.

I've been scratching my head over this as well. Is there enough traffic routed BNSF from Clinton south to the Quad Cities and then north on the BNSF Barstow Sub? It will also be interesting to see their plan for the connection in Savanna as the CP diamond is pretty close to the Mississippi River.

DevalDragon Wrote:
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> UP would be most unhappy if BNSF gained direct
> access to Laredo. It will certainly make things
> interesting though.

BNSF's request for trackage rights to Laredo was really a contingent request.

BNSF' s Jan 12, 2022 STB Filing included an anticipated request for:
“springing” or contingent overhead trackage rights on a line owned by The Kansas City
Southern Railway Company (“KCS”) between Robstown, Tex. and Laredo, Tex.

However, the Filing also included the following footnote:
The imposition of BNSF’s overhead trackage rights between Robstown, Tex.
and Laredo, Tex. would take effect only if and when BNSF obtains the right to directly
serve shippers in Mexico through a concession with the Mexican government.

I am expecting BNSF wants these contingent trackage rights to be in a position to
bid on KCS' Mexico Concession when it expires in 2047.

ALLEN

BNSF owns and operates a very old moveable span bridge in the Quad Cities that provides them access to the CP Davenport Sub on the west side of the Mississippi up to Clinton. Conversely, CP utilizes this bridge to access their Nitrin Sub on the east side of the Mississippi along with access to IAIS and some customers in Rock Island IL.

It’s been rumoured for years that BNSF’s bridge is on borrowed time and that it’s weight restricted as well. BNSF requesting rights from Savanna to Clinton would allow them to access the CP Davenport Sub and all their customers (including ADM at Clinton) from the north and may allow them to abandon their bridge in the Quad Cities. Might also provide full weight (286k) capacity to BNSF as well. Not sure how CP would access their Nitrin Sub customers, possibly by utilizing the IAIS Government Bridge in the Quad Cities, which they already use on a periodic basis.

Posted from iPhone

ironmtn Wrote:
-------------------------------------------------------
> One more shoe has dropped. CN already made their
> request:
> https://www.trainorders.com/discussion/read.php?1,
> 5399884
> Now BNSF and NS have joined with theirs.
> More to come? Will we hear from CSX and UP? The
> deadline is approaching. Stay tuned.
>
> Oh yes, fire up the popcorn machine....
>
> MC

I wonder if CP told CSX that the price of their silence in the CSX - PanAm deal was CSX's silence in the CP - KCS deal.

SOO6617 Wrote:
-------------------------------------------------------
> ironmtn Wrote:
> --------------------------------------------------
> -----
> > One more shoe has dropped. CN already made
> their
> > request:
> >
> https://www.trainorders.com/discussion/read.php?1,
>
> > 5399884
> > Now BNSF and NS have joined with theirs.
> > More to come? Will we hear from CSX and UP? The
> > deadline is approaching. Stay tuned.
> >
> > Oh yes, fire up the popcorn machine....
> >
> > MC
>
> I wonder if CP told CSX that the price of their
> silence in the CSX - PanAm deal was CSX's silence
> in the CP - KCS deal.


Excerpt from CSXT Petition For Waiver with the STB on Jan 12, 2022:
Based on the Applicants’ representations in their Application and the materials Applicants haveproduced in discovery, CSX Transportation, Inc. (“CSXT”) has discerned no need to seek conditions that would require a responsive application. Discovery, however, is not yet complete and other parties may seek conditions that would change the competitive impact of the Applicants’ proposed Transaction.
CSXT, therefore, under 49 C.F.R. §1180.4(f), respectfully requests that the Board grant a
contingent waiver of the January 12, 2022, deadline for the submission of descriptions of anticipated responsive applications.1 That waiver would permit later descriptions and requests for responsive applications if new evidence or other parties’ pleadings demonstrate that the Transaction will likely have material impacts on competition beyond those shown in the Application.

Looks like CSX wants to keep a low profile but keep its options open.

Interestingly, UP is following the same course as CSX.

Excerpt from Union Pacific filing with the STB on Jan 12, 2022:
Union Pacific Railroad Company joins in CSX Transportation, Inc.’s Petition for Waiver
filed January 12, 2022 (CSXT-5). Union Pacific is joining in CSXT’s Petition, rather than
submitting its own separate petition, with the understanding that the requested waiver would apply to Union Pacific and any other party for the reasons and under the circumstances described in CSXT’s Petition.

I can see CSX not wanting to make waves that could sink the Pan Am deal.

On the other hand, I think UP is just waiting to see how big of a grab they can make.

We will see.

ALLEN


 

CPKC and UP have a lot of leverage against each other. CPKC needs to get their trains through the congested Houston metro on UP rails and where those UP rails largely serve traffic that originates or terminates in the region. 

And CPKC owns the Laredo gateway which is strategically important to UP.

It's a stalemate and neither side can afford to mess with the other too much, or give incentives to the STB to tilt in one or the other direction. 

pbouzide Wrote:
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> CPKC and UP have a lot of leverage against each
> other. CPKC needs to get their trains through the
> congested Houston metro on UP rails and where
> those UP rails largely serve traffic that
> originates or terminates in the region. 
>
> And CPKC owns the Laredo gateway which is
> strategically important to UP.
>
> It's a stalemate and neither side can afford to
> mess with the other too much, or give incentives
> to the STB to tilt in one or the other
> direction. 

A situation which CN appears to be taking advantage of, both as the jilted suitor for a bit of redress, and with a not illogical case for some competitive balance. As for CSX, the waters are murkier. They have concerns in New England to deal with, and probably don't want them mussed up without good cause. But for now they are hiding their hand. Railroad geopolitics can get interesting.

MC