Western Railroad Discussion > NS and UP kick CP out of EMP Business

In the not shocking news category... what is likely the first of many moves by other class 1s to move traffic away from CP as a result of the CPKC merger, CP is losing the EMP container program in a few weeks. NS and UP have opted to shift EMP traffic to CN. The CN will see its EMP business now expand to include all of Canada.



Edited 2 time(s). Last edit at 09/19/22 06:09 by AaronJ.

EMP?

One of UP's container services. Been around since the 1980s.

https://www.up.com/customers/premium/emp/index.htm

This was UP's decision, not Norfolk Southern's, according to the CP customer advisory issued last week.

Maybe I'm missing something but why are the class 1's so dead set against the CPKC merger that they resort to what looks like a temper tantrum?

Mark Kennebeck
Saint Paul, MN

commissioner Wrote:
-------------------------------------------------------
> Maybe I'm missing something but why are the class
> 1's so dead set against the CPKC merger that they
> resort to what looks like a temper tantrum?

No; CP/KCS and UP would be direct competitors if the merger is approved.

There are 10's of thousands of auto parts moving in containers between Mexico and the Midwest. All of that will be subject to competition from a single line KCS-CP routing. Makes sense for UP to deny CPKC the use of UP's extensive EMP container fleet. 

The revenue at risk is significant

The UP needs more competition from other roads, so this is a good thing.  I say that as a shareholder in the new CP merger.  I voted against the CN merger with KCS.

coach Wrote:
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> The UP needs more competition from other roads, so
> this is a good thing.  I say that as a
> shareholder in the new CP merger.  I voted
> against the CN merger with KCS.

I wouldn't disagree with that, but if I'm  UP, I don't want somebody taking food out of my mouth using MY equipment.  Personally, I would have voted against BOTH mergers.



Edited 1 time(s). Last edit at 09/21/22 18:00 by junctiontower.

Much of the topic in this thread has me confused; wasn't the EMP program just a giant container pool supply between multiple railroads?  I never heard of it being an actual transportation marketing business with specific "EMP" customers.  Assuming my assumptions about this is true, then this will merely mean that CP has to find a new supply of domestic containers for its intermodal business (they already have a huge fleet), and there will be less equipment efficiency's, or down right barriers, where CP intermodal business would move over to an interchange carrier (with a pool agreement, the other carrier now treats the container equipment as their own for another customer after its unloaded).

MP403 Wrote:
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> This was UP's decision, not Norfolk Southern's,
> according to the CP customer advisory issued last
> week.

EMP is jointly run by NS and UP...hence NS had to be fine with this move even if UP played the bad guy by telling CP. CPs loss is CNs gain



Edited 1 time(s). Last edit at 09/19/22 15:07 by AaronJ.

wyeth Wrote:
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> Much of the topic in this thread has me confused;
> wasn't the EMP program just a giant container pool
> supply between multiple railroads?  I never heard
> of it being an actual transportation marketing
> business with specific "EMP" customers.  Assuming
> my assumptions about this is true, 

You won't see those green containers on BNSF trains.

PCBill

Very rarely you do. Only when UPS decided to move a box come hell or high water. And then it is quickly returned back to EMP roads. 

But yes, UP wasn't going to allow CP to move that using the EMP pool. Since CP doesn't have that large of a container pool to replace the usage of EMP, that does put them at a disadvantage. 

Mo


bmarti7 Wrote:
-------------------------------------------------------
> wyeth Wrote:
> --------------------------------------------------
> -----
> > Much of the topic in this thread has me
> confused;
> > wasn't the EMP program just a giant container
> pool
> > supply between multiple railroads?  I never
> heard
> > of it being an actual transportation marketing
> > business with specific "EMP" customers. 
> Assuming
> > my assumptions about this is true, 
>
> You won't see those green containers on BNSF
> trains.
>
> PCBill

 

See comments below...

wyeth Wrote:
-------------------------------------------------------
> Much of the topic in this thread has me confused;
> wasn't the EMP program just a giant container pool
> supply between multiple railroads? 

Yes and no. It is a large domestic interline container pool service offered by Union Pacific and Norfolk Southern. CP was only an agent rail as CN and FEC will remain but rails such as CSX and BNSF have no access.


> I never heard
> of it being an actual transportation marketing
> business with specific "EMP" customers. 

Multiple companies use EMP exclusively but its not comparable to say Schneider. Again it is a domestic interline container pool service with dedicated users.


> Assuming
> my assumptions about this is true, then this will
> merely mean that CP has to find a new supply of
> domestic containers for its intermodal business
> (they already have a huge fleet),

Most EMP customers are using that container pool and not due to some loyalty to the CP... hence EMP users could care less if CN is now moving EMP stacks to say Vancouver or Montreal. With that stated, a few companies that CP steered toward EMP will likely get a sales pitch from CP to switch over to something they control but likely at minimal success due to interchange issues.

> and there will
> be less equipment efficiency's, or down right
> barriers, where CP intermodal business would move
> over to an interchange carrier (with a pool
> agreement, the other carrier now treats the
> container equipment as their own for another
> customer after its unloaded).

Yes, CP will face challenges by essentially going it alone with a container pool (not impossible) as I simply don't see them having much, if any interchange success. A container can ultimately get from say Toronto to Mexico City without ever being given to CP or KCS.



Edited 2 time(s). Last edit at 09/19/22 17:24 by AaronJ.

coach Wrote:
-------------------------------------------------------
> The UP needs more competition from other roads, so
> this is a good thing.  I say that as a
> shareholder in the new CP merger.  I voted
> against the CN merger with KCS.

Why would you vote against the CN/KCS merger if you think UP needs more competition?

DevalDragon Wrote:
-------------------------------------------------------
> coach Wrote:
> --------------------------------------------------
> -----
> > The UP needs more competition from other roads,
> so
> > this is a good thing.  I say that as a
> > shareholder in the new CP merger.  I voted
> > against the CN merger with KCS.
>
> Why would you vote against the CN/KCS merger if
> you think UP needs more competition?

CN is already big enough and strong enough.  CP+KCS is a better fit.  And it will give UP a big competitor in the Mexican corridor traffic.

coach Wrote:
-------------------------------------------------------
> DevalDragon Wrote:
> --------------------------------------------------
> -----
> > coach Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > The UP needs more competition from other
> roads,
> > so
> > > this is a good thing.  I say that as a
> > > shareholder in the new CP merger.  I voted
> > > against the CN merger with KCS.
> >
> > Why would you vote against the CN/KCS merger if
> > you think UP needs more competition?
>
> CN is already big enough and strong enough.
>  CP+KCS is a better fit.  And it will give UP a
> big competitor in the Mexican corridor traffic.


Why would you think CN/KCS wouldn't be a competitor to UP though? Sorry for not making my question clear.

DevalDragon Wrote:
-------------------------------------------------------
> coach Wrote:
> --------------------------------------------------
> -----
> > The UP needs more competition from other roads,
> so
> > this is a good thing.  I say that as a
> > shareholder in the new CP merger.  I voted
> > against the CN merger with KCS.
>
> Why would you vote against the CN/KCS merger if
> you think UP needs more competition?

I'm just agreeing that UP needs somebody to force them to do a better job, but I don't think this merger is going to have any long term effects on how UP operates, and I just think the LAST thing this world needs is more rail mergers, creating even bigger monolithic corporations that are not responsive to anyone.   KCS/CP ways probably the lesser of two evils, but it's like the difference between a punch in nose and a punch in the groin.  I don't look forward to either one.