Why did CN-UP-Ferromex wait until now? Why not years ago?
But Falcon is not the shortest way to Western Canada, or Portland and Seattle.
So....CPKCS and BNSF - will you?
daveklepper Why did CN-UP-Ferromex wait until now? Why not years ago? But Falcon is not the shortest way to Western Canada, or Portland and Seattle. So....CPKCS and BNSF - will you?
Absolutely.. and about why not years ago?.. good question. The timing would certainly point to this as being a response to CPKC. But if the primary objective is to take trucks off the road then two years ago..or 18 years ago when trucking capacity was tight and rates were through the roof... that would have been the time to woo shippers to rail. Right now trucking rates are tanked...
About the shortest distance.. CN never seems to be shortest distance to anywhere... at least they've learned to deal with that over the years, and this partnership may work given that CN has a more expansive network in Canada than CP does.
But I ask the same question. Why now?.. Mexico has been there for a long time.. and Mexico has been a trade partner with the US and Canada for a long time as well. Likely the renewed interest in Mexico is driven by political developments.. i.e. the deterioration of the West's relationship with China.. the prospect of war with Taiwan.. which could certainly result in a damper on trade with China and resultant much lower volumes on rail. Mexico in that context would be China's replacement..
Why now? Because CPKC is stealing intermodal traffic from UP, so UP is replacing it with intermodal traffic that CN used to carry south for interchange. Nothing is coming off the roads. In fact, rail is bleeding intermodal traffic *to* the roads these days - probably since PSR.
Ed KyleWhy now? Because CPKC is stealing intermodal traffic from UP, so UP is replacing it with intermodal traffic that CN used to carry south for interchange. Nothing is coming off the roads. In fact, rail is bleeding intermodal traffic *to* the roads these days - probably since PSR.
PSR and the railroads since the 80's have looked at the profitability of the traffic they haul. Not all traffic is profitable. PSR has hastened the shedding of traffic that doesn't bring a big enough number to the bottom line.
Never too old to have a happy childhood!
The reasons for the change are related to changes in in global supply chains. China is less competitive than they have been in the past. Factor in the cost of shipping from China, and for many products it is cheaper to manufacture products in Mexico rather than China. Add geopolitical risk, and many companies are moving their factories to other SE Asian countries, India, or Mexico. KCS acquired 80 lease returned BNSF Dash-9 locomotives from Wabtec due to a 10% increase in rail traffic in the 4th quarter on KCSdeM.
You may have noticed that Intermodal traffic is down 8% in the 1st quarter of 2023 on a year over year basis. The big driver of that decrease is a fall of 15% in Intermodal volume in the LA - Chicago lane. and a 18% decrease in volume in the LA - DFW lane. The Port of LA/LB have lost serious volumes of containers to ports on the East and Gulf coasts, and I don't think its going to come back.
One thing that I wish would change is that Intermodal and Carload figures for the US subsidiaries of CP (now CPKC) and CN are not included in the figures of weekly loadings reported by the AAR. As CPKC and CN operations in the US become larger the lack of these numbers may hide the shift in rail traffic trends.
BNSF can porovide CPKC a great shortcur vto Western Canada via Denver and Billings.
NP EDie, maybe youshould advise BNSF?
JayBee, you have nailed it with your analysis.
Nearshoring of manufacturing is going to accelerate and Mexico will grow in importance.
Manufacturing shifts to S.E. Asia - on the Pacific side of Asia - will still put containers in to LA/LB.
Manufacturing shifts to India will likely put containers into East Coast ports via the Suez Canal and Mediterranean Sea. Halifax and Port St John are the two closest ports to the Strait of Gibraltar.
The question is: Why would anyone want to? Why do we need a service from Mexico to Western Canada? What's the market? Remember, Canada has about the same population as California, and Washington and Oregon have about the same population as British Columbia, Alberta, Saskatchewan, and Manitoba combined!
All this is is lines on map from CPKC: Look what we can do! Yeah you could if anyone would want to.
The post before yourd suggests the market is emerging. Possibly NPEdie is a better judge of that than me, however.
Is it a response?.. No... To expand on a few comments here. With CPKC, CN lost its friendly intermodal interchage at Jackson, MS with KCS. CP being removed from the EMP network prior to the merger which CN is now the exclusive Canadian partner. This is the impetus for the new Falcon Premium.
To JayBee's points on traffic and trade. The Westcoast(POLA/POLB specifically)is still stocked with high inventory levels being 9% higher than pre-COVID. Add in low invetory cycle time plus labor strife bewteen Westcoast ILWU and the PMA. Has created a sour relationship with work stoppages. However recently there's been progress in talks between the association and ILWU. Nearshoring may not be the remedy most believe it will be yet time will tell so hold the deck.. Nearshoring requires a massive investment in equipment to bring production nearshore. This will take a decade to scale out possibly less. In addition pay attention to Vietnam, which recently has exploded in manufacturing and will continue to including the entirety of the ASEAN as well. Vietnam is roughly the same sailing time across Transpac as China for some lanes. Shipping from Vietnam favors POLA/POLB due to transload capacity. The Eastcoast and the Gulf have benefited from the Westcoast labor issues and clogged DC's. Shipping to the Eastcoast/Gulf is 15-25% higher in cost than the Westcoast..Due to higher labor cost, low transload capacity, higher bunkering cost for vessels, add in tolls via the Panama Canal.
Concerning the CANAMEX(Western Canada and US to Mexico)Corridor the only IM lane is Gulf to SeaTac yet that's even limited. The corridor is dominated by forest, energy, chemicals, and agri-business. There's very little to no waybills for IM traffic outside the former I stated. CANAMEX is a carload biased lane. So there will be no BNSF-CPKC interline here between the borders.
Questions that should be asked.. What is CPKC doing about the Houston Terminal? Your core route has to rely on trackage rights on UP in this key market. CPKC say it will accomplish Laredo-Chicago with 3rd availabilty? No way... Even Schneider which just transitioned all Laredo-CHI to CPKC behind the scenes has stated CPKC won't be able to do that. They expect 4th day availability. CPKC's SVP Jonathan Wahba stated they've pulled it off... Yeah with delays to other traffic. How will that work out for other customers?.. The truth is as Mark has stated CPKC's core route is terrible and has a poor entry into the Chicago area. While bypassing Will County where the action is at for DC's/Warehousing... So now you have long time consuming drays bewteen Bensenville, and Will County.. Where as BNSF, and UP put boxes right at the DC's.
CPKC has a an even worse Eastern network no owned route between CHI-DET relying purely on trackage rights. No tunnel at DET-WIN to clear 2xHC's they have to use CSX via Buffalo/Fort Erie. Eastern Canada where over 50% of the population resides is a part of the NAFTA Corridor. With heavy traffic between Mexico-Golden Horseshoe-Montreal. CPKC lacks the network capacity to compete with 401/402, I-94/69/65/55/57/35 and so forth..
The other questions that should be asked? Why now did CP-KCS merge when they could of years ago? They were never heavy interchange partners? UP dominated interchange with KCS. With UP holding 60% of interline at Laredo.. Truth be told UP should've gotten KCS/KCSdeM. Perhaps the STB should not have had so much spite for the other C1's to approve the merger. Being it was only a defensive merger that is only trying to poach traffic from; BNSF, and UP to cover the OPEX for its expensive route...
Also my final points. Take note that recently CPKC has gained Knight-SWIFT in the Laredo-CHI lane. Yet K-S is not giving all of its traffic to CPKC. UP wil retain the balance in this lane. Looking at Schneider pay attention that they only gave CPKC Laredo-CHI. Nothing outside.. It's especially noteworthy that nothing to Eastern Canada was included.. Wonder why?
For what it is worth, here is a link to the UP press release for Falcon Premium Intermodal Service.
https://www.up.com/customers/premium/mexico-to-canada/index.htm
kgbw49 For what it is worth, here is a link to the UP press release for Falcon Premium Intermodal Service. https://www.up.com/customers/premium/mexico-to-canada/index.htm
I wonder why there is no expedited service shown to Prince Rupert (which was one of the shortest great-circle routes to significant Asian markets). One interesting thing would be production from the maquiladores in the Monterrey area going via Halifax to EC markets... they'll need a very carefully assured transit across the Chicago region to do that right.
Here is the Falcon Premium Intermodal Service Schedule that Overmod noted:
https://www.up.com/cs/groups/public/@uprr/@customers/documents/up_pdf_nativedocs/pdf_up_cust_prem_falcon_matrix.pdf
SD60...
Love that analysis. Thanks for posting that. CP certainly doesnt have a strong Chicago to eastern Canada route, one could extend that to KC to eastern Canada. Hats off to EHH for the EJE purchase and integration.
As stated previously, perhaps the best alternative is trackage rights on NS across the old Wabash to KC. A connection could be made just west of St. Joe, In. carving up more of that fertile Hoosier farmland. Still wouldnt address the Chicago issue and it would require splitting Eastern Canada intermodal into two trains or a block set out. Doubt if the volume would be worth the effort, or as they say at Stanford "is the juice worth the squeeze?"
It is fun looking at maps.
Ed
It may be difficult to appraise the competitiveness of Falcon Service until we see actual and achievable service times for the CPKC 'alternative'. To me, looking at the published schedule, the CN/UP/GdM service is not named for a bird (or a C&NW train) but a certain model Ford.
"Time" from Monterrey to Halifax is a blistering 10.9 days... that's a 16:30 cutoff Monday to Friday, and 15:34 availability likewise, but they don't mention if that's local or Zulu time.
Going the other way, it's 11.6 days, but listed as daily service: gate cutoff 17:30 and available at 5:00.
That represents 261 hours northbound and a blistering 278 southbound.
SD60MAC9500 To JayBee's points on traffic and trade. The Westcoast(POLA/POLB specifically)is still stocked with high inventory levels being 9% higher than pre-COVID. Add in low invetory cycle time plus labor strife bewteen Westcoast ILWU and the PMA. Has created a sour relationship with work stoppages. However recently there's been progress in talks between the association and ILWU. Nearshoring may not be the remedy most believe it will be yet time will tell so hold the deck.. Nearshoring requires a massive investment in equipment to bring production nearshore. This will take a decade to scale out possibly less. In addition pay attention to Vietnam, which recently has exploded in manufacturing and will continue to including the entirety of the ASEAN as well. Vietnam is roughly the same sailing time across Transpac as China for some lanes. Shipping from Vietnam favors POLA/POLB due to transload capacity. The Eastcoast and the Gulf have benefited from the Westcoast labor issues and clogged DC's. Shipping to the Eastcoast/Gulf is 15-25% higher in cost than the Westcoast..Due to higher labor cost, low transload capacity, higher bunkering cost for vessels, add in tolls via the Panama Canal.
To your points on Nearshoring;
The cost to build new plant in Vietnam, Thailand, Malaysia, or Indonesia will be only slightly less than in Mexico. Second, only Indonesia has a population even slightly close to that of China at 273 million. Vietnam and Malaysia are both under 100 million people. Moving production to the South Asian countries like Bangladesh, Thailand, or India favors East Coast ports. Separately there is Canada's plan to double capacity at the Deltaport terminal south of Vancouver. A major reason why nearshoring is beginning is the Geopolitical risk is increasing in China. You may or may not be aware that the Chinese government in recent months has been investigating various financal services companies like Mintz Group, a due diligence firm, claiminng National Securrity concerns.
Bain & Co. and Mintz Group
I agree with this mostly although I expect a limited volume of traffic between Alberta and Mexico, I expect maybe twenty or so TEUs per day each way. It will move on existing trains.
So why do UP and BNSF operate IM trains to terminals other than those at LPC or G4? Answer, because not all containers are destined for LPC.
The other questions that should be asked? Why now did CP-KCS merge when they could of years ago?
That is an easy question to answer, the previous Presidents of CP either lacked vision or thought that parcelling out the railway was the best way to achieve profits for their shareholders, mainly Wall Street investment firms, I'm looking at you Children's Fund (TCIF). Remember the St. Lawrence and Hudson Rwy, and the IMRL, and the sale of the lines to Wisconsin Central. EHH in particular scorned the KCS and tried to acquire CSX and then NS, which a sensible person would have seen was never going to happen.
They were never heavy interchange partners? UP dominated interchange with KCS. With UP holding 60% of interline at Laredo.. Truth be told UP should've gotten KCS/KCSdeM.
If that had happened UP would have abandoned most of KCS or shortlined it with applicable paper or steel barrriers, as soon as they judged the political winds were right. In Mexico they would not have gotten KCSM without divesting their share of ownership of Ferromex, probably to BNSF.
Perhaps the STB should not have had so much spite for the other C1's to approve the merger. Being it was only a defensive merger that is only trying to poach traffic from; BNSF, and UP to cover the OPEX for its expensive route.
Well UP hasn't done much to earn the STB's favor, many more embargoes than all the other Class I railroads, service problems keeping Foster Farms supplied with grain. In concert with BNSF having problems moving containers out of Los Angeles. And you can't argue that many of these problems weren't of their own making. As to poaching traffic from UP at Laredo, its not like UP couldn't have seen this coming, they could have preventatively improved their offering, after all they have known the merger was going to happen for more than a year.
JayBee To your points on Nearshoring; The cost to build new plant in Vietnam, Thailand, Malaysia, or Indonesia will be only slightly less than in Mexico. Second, only Indonesia has a population even slightly close to that of China at 273 million. Vietnam and Malaysia are both under 100 million people. Moving production to the South Asian countries like Bangladesh, Thailand, or India favors East Coast ports. Separately there is Canada's plan to double capacity at the Deltaport terminal south of Vancouver. A major reason why nearshoring is beginning is the Geopolitical risk is increasing in China. You may or may not be aware that the Chinese government in recent months has been investigating various financal services companies like Mintz Group, a due diligence firm, claiminng National Securrity concerns. Bain & Co. and Mintz Group
Looking between Vietnam and Mexico,
Plant build out cost:
Vietnam $412USD/sqm
Mexico $562/sqm
27% that's a pretty substantial cost difference...
It's not only cost to build plants its; labor, cheap abundant energy, and government policy investment. When it comes to labor:
Vietnam comes in at $2.73USD/H
Mexico $4.45USD/H
Mexico is also curently battling high energy cost as it has been for years.
JayBee So why do UP and BNSF operate IM trains to terminals other than those at LPC or G4? Answer, because not all containers are destined for LPC.
Both BNSF and UP have a premium segment of intermodal traffic called Z trains that CPKC lack's. These trains carry time sensitive freight not transloaded waterborne freight. Hence why all containers don't go to G4 or LPC. Since CPKC is planning to link Lazaro Cardenas with Chicago. This is where it matters for drayage. Yet I don't expect LC-CHI to become the major lane CPKC thinks it will be. The days of port congestion are over, and LC is 20% more expensive than POLA/POLB-CHI.
JayBee That is an easy question to answer, the previous Presidents of CP either lacked vision or thought that parcelling out the railway was the best way to achieve profits for their shareholders, mainly Wall Street investment firms, I'm looking at you Children's Fund (TCIF). Remember the St. Lawrence and Hudson Rwy, and the IMRL, and the sale of the lines to Wisconsin Central. EHH in particular scorned the KCS and tried to acquire CSX and then NS, which a sensible person would have seen was never going to happen.
CP had nowhere else to go for growth. CP+KCS was strictly a defensive merger nothing more nothing less. Looking at CN's growth and much better network. Adding in CP's past "track" record of scrambling to buy back old properties (DME, IMRL, MM&A) show that in order to stay relevant it needed to grow.
JayBee If that had happened UP would have abandoned most of KCS or shortlined it with applicable paper or steel barrriers, as soon as they judged the political winds were right. In Mexico they would not have gotten KCSM without divesting their share of ownership of Ferromex, probably to BNSF.
JayBee Well UP hasn't done much to earn the STB's favor, many more embargoes than all the other Class I railroads, service problems keeping Foster Farms supplied with grain. In concert with BNSF having problems moving containers out of Los Angeles. And you can't argue that many of these problems weren't of their own making. As to poaching traffic from UP at Laredo, its not like UP couldn't have seen this coming, they could have preventatively improved their offering, after all they have known the merger was going to happen for more than a year.
CPKC has touted they are going to take 138K loads/annum from UP and BNSF. If the merger is suppose to be about growth.. How are they only claiming to be taking 64K truckloads off the highways per annum? Playing musical chairs amongst the C1's rail is not growth regardless of UP knowing the merger time frame. 15K trucks/day cross at Laredo. 64K trucks/annum not much of a dent is it?...
JayBee Are either of these companies big movers of product to Eastern Canada?
Are either of these companies big movers of product to Eastern Canada?
Certainely in fact you can see daily many SNDL and K-S trucks going to eastern Canada by road. CN moves SNDL, and K-S 53's on stack service via Port Huron/Sarnia.. Eastern Canada happens to be a hotspot of manufacturing especially automotive, and has just over 50% of Canada's population.. Once again isn't the merger about growth? Or would SNDL and K-S be cannabalizing lanes for an inferior CPKC routing?
A UP-KCS merger? I don't think so. When the STB denied the voting trust for the CN-KCS merger, they signaled to the industry that even large mergers with far less overlap were not going to be approved. UP-KCS would not have a snowball's chance...
UP would have to divest most of KCS. They would have to get rid of the Springfield Line; the "main stem" from Kansas City down through Shreveport to New Orleans; the Shreveport to Fort Worth line; the combination of trackage rights and owned lines down from Beaumont to Laredo. Take a look at a map and the amount of direct overlap is staggering.
At that point what is UP buying? KSCM and the Meridian Speedway. Not surprisingly, these are the parts of the KCS network that UP made the most use of. As previously mentioned 60% of pre-merger traffic coming off KCSM at Laredo was handed over to UP. UP, while they don't have any ownership, is still a heavy user of the Speedway. I also think they could have retained the Shreveport to Beaumont line with its chemical traffic if they gave trackage rights to another railroad.
If UP wanted to buy KCS, the right time was in the late 1990s or very early 2000s when the mood regarding mergers was different.
MV, agree with that analysis.
The UP play is a last ditch effort to divide up KCS amongst several and grab the parts it wants for itself.
Basically a "Conrail-lite".
The Meridian Speedway helps them penetrate the south where population growth is happening the most and a business-friendly climate is driving economic growth. It gets them awfully close to Atlanta.
CN already expressed its interest in the Springfield line.
If the proceeding was reopened you would see BNSF jump in.
The opportunity to haul freight from the growing number of factories in Mexico to the high population growth region of the US is a significant one.
It is likely to be a growth engine for CPKC that has largely been overlooked.
UP has nothing to lose in trying to reopen the proceedings so they are going for it but it does seem like trying to get the results of the last Super Bowl thrown out so it can be replayed.
kgbw49 MV, agree with that analysis. The UP play is a last ditch effort to divide up KCS amongst several and grab the parts it wants for itself. Basically a "Conrail-lite". The Meridian Speedway helps them penetrate the south where population growth is happening the most and a business-friendly climate is driving economic growth. It gets them awfully close to Atlanta. CN already expressed its interest in the Springfield line. If the proceeding was reopened you would see BNSF jump in. The opportunity to haul freight from the growing number of factories in Mexico to the high population growth region of the US is a significant one. It is likely to be a growth engine for CPKC that has largely been overlooked. UP has nothing to lose in trying to reopen the proceedings so they are going for it but it does seem like trying to get the results of the last Super Bowl thrown out so it can be replayed.
I was more responding to SD90MAC's opinion that UP-KCS would have been preferable.
During the STB hearings, UP wanted the STB to establish what they call a “rate mechanism” for freight moving through the Laredo border crossing. As once again mentioned 60% of KSCM traffic at Laredo was handed over to UP. The merger means that CPKC doesn't have to give as much traffic to UP at Laredo anymore. UP’s “rate mechanism” would have prevented CPKC from diverting a lot of this traffic over its own network since it would lock in the pre-merger rates. If I were to guess implementing this “rate mechanism” would be UP’s main goal in this lawsuit, not splitting KCS Conrail-style.
A Conrail-syle split of KCS would have been interesting. Of course with CPKC being a done deal now, all of it is simply alternate history. It's still fun to talk about!
Michael Vomvolakis A UP-KCS merger? I don't think so. When the STB denied the voting trust for the CN-KCS merger, they signaled to the industry that even large mergers with far less overlap were not going to be approved. UP-KCS would not have a snowball's chance... UP would have to divest most of KCS. They would have to get rid of the Springfield Line; the "main stem" from Kansas City down through Shreveport to New Orleans; the Shreveport to Fort Worth line; the combination of trackage rights and owned lines down from Beaumont to Laredo. Take a look at a map and the amount of direct overlap is staggering. At that point what is UP buying? KSCM and the Meridian Speedway. Not surprisingly, these are the parts of the KCS network that UP made the most use of. As previously mentioned 60% of pre-merger traffic coming off KCSM at Laredo was handed over to UP. UP, while they don't have any ownership, is still a heavy user of the Speedway. I also think they could have retained the Shreveport to Beaumont line with its chemical traffic if they gave trackage rights to another railroad. If UP wanted to buy KCS, the right time was in the late 1990s or very early 2000s when the mood regarding mergers was different.
Of course UP would have to divest most of the KCS. Concerning the KCMO-Beaumont Line. They already operate the Muskogee Line which bypasses the roller coaster in the Ozarks and Quachita Mts.
As to the Springfiled Line I don't see that being divested from UP. Considering it connects with the UP's exisiting Alton line at Springfield. It would allow UP to bypass TRRA, and gets their IM trains off the BNSF between Joliet-KCMO. Of course the line would need a major upgrade as it does now.
UP had already threw in its bid for the Mexican Northeast concession back in 1997. However just coming off a merger with SP might have been the hindrance allowing KCS to grab it.
Concerning the Meridian Speedway that would go to NS. So they're not shorthauling between Atlanta-Shreveport where they currently interchange with UP.
@kgbw49 I worte a piece on Linkedin last year that briefly touched on a hypothetical Conrail-esque split of KCS.
UP already lost one intermodal client (Schnieder) to CP-KCS and CN probably realizes it will lose customers to it as well. I think Schnieder stated they are not so interested in the time it takes to move frieght as they are with the single line of service. Which in my view says the railroads can't work together jointly and the client ends up in frustration. Sad they have to merge together in order to get better customer service. It's 2023 and you would have thought the railroads would have figured out how to serve the client best by now.
Airlines long ago figured out how to share their passenger revenue with the large alliances between carriers.
Granted, airline passengers "switch themselves" at hubs.
BNSF has seemed to partially have figured things out with CSX to North Baltimore and both CSX and NS to Atlanta.
CMStPnPWhich in my view says the railroads can't work together jointly and the client ends up in frustration.
Back in the day, there was at least one "alphabet" routing that involved something like five railroads... The specifics elude me, but it was in the northeast.
Thing is, they advertised this routing. I'm presuming that it worked, at least for a while.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
SD60MAC9500 Michael Vomvolakis A UP-KCS merger? I don't think so. When the STB denied the voting trust for the CN-KCS merger, they signaled to the industry that even large mergers with far less overlap were not going to be approved. UP-KCS would not have a snowball's chance... UP would have to divest most of KCS. They would have to get rid of the Springfield Line; the "main stem" from Kansas City down through Shreveport to New Orleans; the Shreveport to Fort Worth line; the combination of trackage rights and owned lines down from Beaumont to Laredo. Take a look at a map and the amount of direct overlap is staggering. At that point what is UP buying? KSCM and the Meridian Speedway. Not surprisingly, these are the parts of the KCS network that UP made the most use of. As previously mentioned 60% of pre-merger traffic coming off KCSM at Laredo was handed over to UP. UP, while they don't have any ownership, is still a heavy user of the Speedway. I also think they could have retained the Shreveport to Beaumont line with its chemical traffic if they gave trackage rights to another railroad. If UP wanted to buy KCS, the right time was in the late 1990s or very early 2000s when the mood regarding mergers was different. Of course UP would have to divest most of the KCS. Concerning the KCMO-Beaumont Line. They already operate the Muskogee Line which bypasses the roller coaster in the Ozarks and Quachita Mts. As to the Springfiled Line I don't see that being divested from UP. Considering it connects with the UP's exisiting Alton line at Springfield. It would allow UP to bypass TRRA, and gets their IM trains off the BNSF between Joliet-KCMO. Of course the line would need a major upgrade as it does now. UP had already threw in its bid for the Mexican Northeast concession back in 1997. However just coming off a merger with SP might have been the hindrance allowing KCS to grab it. Concerning the Meridian Speedway that would go to NS. So they're not shorthauling between Atlanta-Shreveport where they currently interchange with UP. @kgbw49 I worte a piece on Linkedin last year that briefly touched on a hypothetical Conrail-esque split of KCS.
Not sure how/where you get the idea that an acquisition of KCS by (especially) UP would have more than a snowball's chance in hades of ever passing the sniff test. Let's consider: (1) UP gobbled up both MP and WP in 1982 (2) got the MKT in 1988 (3) FINALLY got its merger partner made in heaven [I guess] CNW in 1995 and (4) was inexplicably able to gobble up both SP/DRGW which should NEVER have been allowed to happen.
If ANY one merger should be undone, it's UP's acquisition of SP/DRGW that effectively killed off any chance of a three-system west and whether that was as an independent SP/DRGW or in combination with CPRS - whatever. Now we have big bad arrogant UP whining and moaning about CPKC and how they're getting shut out at the Laredo gateway. You know what I say? (Expletive deleted) them.
The utter arrogance of UP is seriously one of the most incredible things I've seen as either someone who has followed the industry closely or as an employee in the industry. I saw that same trait with CNW back in the day and I see they picked up quite nicely.
[/quote]
tree68 Back in the day, there was at least one "alphabet" routing that involved something like five railroads... The specifics elude me, but it was in the northeast. Thing is, they advertised this routing. I'm presuming that it worked, at least for a while.
CSSHEGEWISCH tree68 Back in the day, there was at least one "alphabet" routing that involved something like five railroads... The specifics elude me, but it was in the northeast. Thing is, they advertised this routing. I'm presuming that it worked, at least for a while. The Alphabet Route ran between Chicago and Baltimore over NKP, W&LE, P&WV and WM and it was a competitive routing.
My recollection of the Alphabet Route was that the destination was New England, not Baltimore.
Once the WM got the traffic at Connellsville from P&WV it delivered it to the RDG at Lurgan, PA - I believe RDG carried it to a interchange with the CNH who inturn interchanged with the Lehigh & Hudson River that took it to a interchange with the New Haven.
https://alphabetroute.com/
I could be mistaken.
Los Angeles Rams Guy Not sure how/where you get the idea that an acquisition of KCS by (especially) UP would have more than a snowball's chance in hades of ever passing the sniff test. Let's consider: (1) UP gobbled up both MP and WP in 1982 (2) got the MKT in 1988 (3) FINALLY got its merger partner made in heaven [I guess] CNW in 1995 and (4) was inexplicably able to gobble up both SP/DRGW which should NEVER have been allowed to happen. If ANY one merger should be undone, it's UP's acquisition of SP/DRGW that effectively killed off any chance of a three-system west and whether that was as an independent SP/DRGW or in combination with CPRS - whatever. Now we have big bad arrogant UP whining and moaning about CPKC and how they're getting shut out at the Laredo gateway. You know what I say? (Expletive deleted) them. The utter arrogance of UP is seriously one of the most incredible things I've seen as either someone who has followed the industry closely or as an employee in the industry. I saw that same trait with CNW back in the day and I see they picked up quite nicely.
I think we can all agree UP and KCS wouldn't have happened even with my opinion that UP should have acquired them...
Why does the west need 3 systems? All that would do is drive up cost and create a weak performing carrier. The Rio Grande has too many cons going against it to be a through route... One.. The Moffat Road can't accommodate double-stacks. Tennessee Pass can yet has 3% grade EB with a long 1.4% grade WB. Add in heavy snow with a capacity constricted route through the Royal Gorge, and I can't forget that terrible climb both ways across Solider Summit. 2% EB, 2.4% WB?..
UP and SP always belonged together E.H.Harriman saw this back in 1900. SP/DRGW was not going to survive on its own as 3rd carrier... Flanked by BNSF and UP with greater market penetration and traffic generation.
I think we need to quit having this mindset that having a bunch of railroads competing for limited traffic will improve the industry. Industry consolidation has always been sought to drive scope and scale while eliminating interchange and lowering line haul cost.
Does trucking have such barriers?
It could be worse. Futuremodal could come crawling out from under his rock and start singing the praises of open access.
CMStPnP UP already lost one intermodal client (Schnieder) to CP-KCS and CN probably realizes it will lose customers to it as well. I think Schnieder stated they are not so interested in the time it takes to move frieght as they are with the single line of service. Which in my view says the railroads can't work together jointly and the client ends up in frustration. Sad they have to merge together in order to get better customer service. It's 2023 and you would have thought the railroads would have figured out how to serve the client best by now.
Well, I don't believe Schneider. Again it seems too much a coincidence that the "switch" came right after the CP-KCS merger was approved. I think they are saying this because they got some kind of sweetheart deal from CPKC. The CPKC routing is costing them big time in equipment cycle time, so they must be getting something in return. The "single line" excuse only gets you so far.
Beyond that, their claim makes no sense. Having been involved in mergers before, it seems unlikely that mere weeks after the merger, all of a sudden there can be seamless one-carrier tracking of their shipments and handling of their equipment. Also, CPKC's single line seamlessness isn't a real thing, since they are at the mercy of other carriers (some of which are competition) between Robstown and Beaumont, across the Chicago terminal, and between Chicago and Detroit or the Buffalo area. Couple all these inferiorities together and a direct UP-CN interchange in Joliet looks pretty darn seamless in itself.
We don't know if this market from Mexico to Detroit or Toronto is all that lucrative. It really remains to be seen. But if it is, the will to retrieve the business and the technology to do it to create similar seamlessness akin to "single line" is clearly achievable. UP/CN can match the CPKC service Schneider supposedly likes, but CPKC will never ever be able to match the highly superior and less-costly route and operating profile of UP/CN in this lane. If the business is that worthwhile, CPKC is doomed to lose it eventually.
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