Doublestack wrote: What an absolutely pathetic move on the part of STB. Lets see, how would CP acquiring DM&E affect competition in rail transportation in Wall, SD - or elsewhere along the route? It certainly doesn't allow CP to gain more market share in a market in which they already participate. There's one RR from Winona, MN to Colony, WY today and there will be one after this transaction. Seems there's nothing for the STB to decide.I would suggest that BNSF and UP are far more behind this one than Mayo - given that they have something to lose in terms of a 3rd carrier busting up a bit of the monopoly they hold in the Powder River Basin. If you read the BNSF 3rd Qtr earnings release, they tout the fact that coal revenues went up 13% year over year, while units moved remained the same. When you have that kind of pricing power in spite of overall inflation at 2-3%, you're going to call in the political cards to keep a strangle hold on it.
What an absolutely pathetic move on the part of STB. Lets see, how would CP acquiring DM&E affect competition in rail transportation in Wall, SD - or elsewhere along the route? It certainly doesn't allow CP to gain more market share in a market in which they already participate. There's one RR from Winona, MN to Colony, WY today and there will be one after this transaction. Seems there's nothing for the STB to decide.
I would suggest that BNSF and UP are far more behind this one than Mayo - given that they have something to lose in terms of a 3rd carrier busting up a bit of the monopoly they hold in the Powder River Basin. If you read the BNSF 3rd Qtr earnings release, they tout the fact that coal revenues went up 13% year over year, while units moved remained the same. When you have that kind of pricing power in spite of overall inflation at 2-3%, you're going to call in the political cards to keep a strangle hold on it.
I just ran across this string. STB did NOT decide that the CP-DME transaction was a "major" transaction. STB uses four categories for consolidations. In increasing magnitude, they are (i) exempt, (ii) minor, (iii) significant, and (iv) major. STB decided that the CP-DME transaction would be handled as "significant".
And what, pray tell, is your authority for saying that UP was somehow behind the STB's decision to clasify this transaction as "significant"s? If you will look at the STB website, you will see that UP has made NO substantive filings in this proceeding. And, if you dig a little further into news articles and press releases on UP and DME over the last year or so, you will find that UP waived provisions in its contracts with DME which could have been used to prevent the CP transaction.
The reason for the purchase is VERY obvious. If you have been following what is going on in northern Canada, especially Alberta and BC, mining operations are going full tilt, and the $$ are enormous!!! The tracks up there are in bad shape, and the present owners do not have the $$ to make the improvements, nor the time to get the job done to satisfy the shippers.
There is big time money to be made, that is why CN jumped in, wise move in my opinion.
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