Canadian Pacific Railway and Kansas City Southern announced they have received statements from nearly 260 shippers, other railroads, economic development authorities, ports and other supporters for their planned combination that would create the first rail network connecting the U.S., Mexico, and Canada. Many of these supporters requested the Surface Transportation Board (STB) to review the transaction as swiftly as possible. The statements and letters were filed with the STB.
Shippers and supporters across North American regions and industries – including Maersk, Hyundai Glovis, Kraft, Nestlé, Hapag-Lloyd, North Dakota Grain Dealers Association, Evergreen, Boise Cascade Wood Products Building Materials, Ragasa Industrias S.A., and Ag Processing — say they hope the combination would invigorate transportation competition, expand access to existing and growing markets and provide new service offerings that would improve transit times and reliability. In addition, the nation’s largest short-line holding railroad company, Genesee & Wyoming, has filed in support of the combination, as well as other short-line railroads.
Joining seamlessly in Kansas City, Mo., CP and KCS together would connect customers via single-network transportation offerings between points on CP’s system throughout Canada, the U.S. Midwest, and the U.S. Northeast and points on KCS’ system throughout Mexico and the South Central U.S.
The CP-KCS combination is expected to provide an enhanced competitive alternative to existing rail service providers and is expected to result in improved service to customers of all sizes. Grain, automotive, auto-parts, energy, intermodal, and other shippers, would benefit from the increased efficiency and simplicity of the combined network, which is expected to spur greater rail-to-rail competition and support customers in growing their rail volumes. The single integrated rail system would also connect premier ports on the U.S. Gulf, Atlantic and Pacific coasts with key overseas markets.
While remaining the smallest of six U.S. Class 1 railroads by revenue, the combined company would be a much larger and more competitive network. The transaction is also expected to create jobs across the combined network. Additionally, efficiency and service improvements are expected to achieve meaningful environmental benefits.
CP is seeking approval from the STB for the combination, which also remains subject to the approvals of CP and KCS shareholders and other customary closing conditions. The STB review is expected to be completed by the middle of 2022.