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Blackstone Group Launches Takeover Bid Of KCS

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Posted by jeffhergert on Friday, September 4, 2020 9:46 PM

Over on the Huron Central thread, it's said the province has subsidized it's operation.  Why don't they just buy it outright, pay to maintain it and open it up to open access?

Jeff

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Posted by jeffhergert on Friday, September 4, 2020 9:40 PM

zugmann

 

 
jeffhergert
Operating-only companies are only going to go after large volume traffic.  Where there is "competition" you will end up with shippers that won't get service because no one wants their business.  

 

I mean, PA  has the Susquehanna Economic Development Association - Council of Governments Joint Rail Authority (SEDA-COG JRA)  and The Pennsylvania Northeast Regional Railroad Authority (PNRRA). 

Still plenty of carload service on both.  

 

Are they open access*, or are their lines worked by a designated operator?

Are the origins/destinations their cars are going to/coming from on lines subject to open access* or served by a single carrier? 

Right now, it's working because the general system is working like it always has.  I'm saying open access and/or private ownership is going to turn the rules of rail transportation upside down.  It's going to change the common carrier obligations as we know them.  If there's only a single operator, when it comes right down to it that operator has to accept the freight.  When you have multiple operators, how can you force only one to service a customer that no one wants?  

The origin/destination points for SEDA-COGJRA and PNRRA freight in a open access world may have carriers that don't want that business.  In a public ownership world, those points may not have any rail service at all.     

*Some places where there are two or more carriers, there may be a form of open access called reciprocal switching.  Most points aren't subject to that and even where there is reciprocal switching, not all customers may be subject to it. 

Jeff 

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Posted by zugmann on Friday, September 4, 2020 9:07 PM

jeffhergert
Operating-only companies are only going to go after large volume traffic.  Where there is "competition" you will end up with shippers that won't get service because no one wants their business.  

I mean, PA  has the Susquehanna Economic Development Association - Council of Governments Joint Rail Authority (SEDA-COG JRA)  and The Pennsylvania Northeast Regional Railroad Authority (PNRRA). 

Still plenty of carload service on both.  

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by jeffhergert on Friday, September 4, 2020 8:53 PM

charlie hebdo

 

 
jeffhergert

Government ownership or open access and you can kiss carload traffic goodbye.  You'll only need a network about the size of Amtrak that just connects major cities.  Only major routes for intermodal and maybe some branches for bulk unit trains.  In a way, that's like John Knieling's vision of future railroads.     

Anything that doesn't fit that model will go by truck.  It'll put more freight on the highways.  Not because it moves to a railhead, but because it will bypass the rail network entirely. 

It's a good way to really marginalize the industry completely. I'm surprised Ttrraaffiicc hasn't thought of this and lent his/her support to it.  Although it would fit in with PSR goals, so Wall Street types would love it.

Jeff  

 

 

 

I'm not sure why you say that.  If the rails could move from just running trains on a fixed set of routes and instead operated integrated transport,  it would seem the rail share of freight might actually increase from its rather small current market share. 

 

Operating-only companies are only going to go after large volume traffic.  Where there is "competition" you will end up with shippers that won't get service because no one wants their business.  

The public ownership network will only encompass major routes between large metropolitan areas.  Some very major corridors may need two separate routes, but most won't. Branches and short lines will probably not get pubic ownership.  I would bet that the Federal and most State governments won't want to pay to own and maintain them.  (Even the public highway network can't be maintained on user taxes alone anymore.)  Even if they remain private, it might be hard to deliver a car to a receiver on the other side of the country.  Another case of no one wanting to handle the load for the 'last mile' delivery.  So the branches and most short lines go away.   The traffic they had goes to trucks.

So you say it will now go intermodal.  Maybe, maybe not.  Depends on where the operating-only companies have their terminals.  Some may fit in nicely with the remaining network.  I'd bet the majority of traffic won't.  It will bypass rails altogether.  A slimmed down freight network becomes as convenient to customers as the Amtrak long distance network is to most passengers.

Of course, this is only my opinion. 

Jeff 

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Posted by SD60MAC9500 on Friday, September 4, 2020 8:40 PM
 

Overmod

Remember that KCS is a north-south railroad with extensive 'connections' into Mexico.  CN already has a perfectly suitable north-south railroad; CP has little reason to acquire one expensively from vulture capitalists who just spent their own hostile mint to acquire it -- I would suspect the presence of a Tim Horton-Burger King style deal to get away from Obama taxation except Obama is no longer there.  It's hard for me to figure out compelling ownership interest by either NS or CSX to go south into what is no longer NAFTA maquiladora bonanza country; UP would likely be overextended; I just don't see BNSF increasing its sole proprietorship of that much more railroad at this time.

 

 

UP wouldn't be overextended as they have a 26% stake in Ferromex. So in that regard UP has no interest in KCS. BNSF+CN+KCS+NS=North American Railways. I rest my case....

Well I won't rest it just yet! North American Railways hypothetical.. Complete the Dease Lake extension in B.C. continuing through Yukon up to Alaska. Two items:

1)Lease some RoW to build a pipeline from Fairbanks through Yukon to B.C. connecting with the lower 48.

2)Build a massive port south of Anchorage in the Cook Inlet. The port would handle containers and bulk traffic giving it a edge over Prince Rupert in sailing time.

While were at it, annex Canada. Canada has a resource potential that rivals and might exceed Siberia.

Now I rest my case..

 
Rahhhhhhhhh!!!!
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Posted by jeffhergert on Friday, September 4, 2020 7:57 PM

SD70Dude

Jeff, is it true that they fired a whole bunch of Dispatchers yesterday?

 

I couldn't say, I've been on vacation the last few weeks.  Go back on Monday.

On UP, dispatchers are management.  They have been consolidating dispr's territories over the system and they are supposed to be rolling out some new CAD on steriods system.  They probably think they won't need so many dispatchers in the future.

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Posted by Miningman on Friday, September 4, 2020 7:04 PM

Balt states : " Feature the last two US Class 1's will be CN & CP."

Well then that makes it easy... drop the 'Canadian'

1) National Lines

2) Pacific Lines 

It kinda makes sense.

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Posted by Overmod on Friday, September 4, 2020 6:07 PM

Remember that KCS is a north-south railroad with extensive 'connections' into Mexico.  CN already has a perfectly suitable north-south railroad; CP has little reason to acquire one expensively from vulture capitalists who just spent their own hostile mint to acquire it -- I would suspect the presence of a Tim Horton-Burger King style deal to get away from Obama taxation except Obama is no longer there.  It's hard for me to figure out compelling ownership interest by either NS or CSX to go south into what is no longer NAFTA maquiladora bonanza country; UP would likely be overextended; I just don't see BNSF increasing its sole proprietorship of that much more railroad at this time.

 

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Posted by SD70Dude on Friday, September 4, 2020 6:06 PM

Jeff, is it true that they fired a whole bunch of Dispatchers yesterday?

Greetings from Alberta

-an Articulate Malcontent

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Posted by charlie hebdo on Friday, September 4, 2020 5:48 PM
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Posted by charlie hebdo on Friday, September 4, 2020 5:43 PM

jeffhergert

Government ownership or open access and you can kiss carload traffic goodbye.  You'll only need a network about the size of Amtrak that just connects major cities.  Only major routes for intermodal and maybe some branches for bulk unit trains.  In a way, that's like John Knieling's vision of future railroads.     

Anything that doesn't fit that model will go by truck.  It'll put more freight on the highways.  Not because it moves to a railhead, but because it will bypass the rail network entirely. 

It's a good way to really marginalize the industry completely. I'm surprised Ttrraaffiicc hasn't thought of this and lent his/her support to it.  Although it would fit in with PSR goals, so Wall Street types would love it.

Jeff  

 

I'm not sure why you say that.  If the rails could move from just running trains on a fixed set of routes and instead operated integrated transport,  it would seem the rail share of freight might actually increase from its rather small current market share. 

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Posted by SD70Dude on Friday, September 4, 2020 5:06 PM

CMStPnP
Gramp
So, is this a step towards two North American major railroads?

The only reason Canada still has two railroads is the government there has an emotional attachment to the CP.   Not sure how that is going to work out with your two railroad plan.

CP has tried to take over CN several times over the years, most recently around 1990.

One of the privatization proposals involved splitting CN in half (remember, this is well before the IC and WC mergers).  CP would have gotten most everything east of Winnipeg (and probably abandoned a lot of it), while an unidentified American railroad (most likely Burlington Northern, though it was never publicly identified) would have been invited to purchase the more profitable western lines.

CN still carries some conditions from the 1995 privatization, but many of them could probably be swept away for the right price in Ottawa.  CP has always been a private company, and has no such handicaps.

The combined CN-BNSF system would have been headquarted in Montreal, and this proposal was killed by the American regulators, not any Canadians. 

CN has slowly been moving administrative and operations staff out of Montreal over the years, most recently all the Canadian Dispatchers and Crew Callers were moved to Edmonton.

Greetings from Alberta

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Posted by BaltACD on Friday, September 4, 2020 5:03 PM

Wall Street only knows money as value - not the value of servicing customers with goods and service.  Businesses, other than banks, don't exist on money alone.

Never too old to have a happy childhood!

              

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Posted by zugmann on Friday, September 4, 2020 4:44 PM

jeffhergert
Government ownership or open access and you can kiss carload traffic goodbye.  You'll only need a network about the size of Amtrak that just connects major cities.

****Gestures wildly at PSR*****

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by jeffhergert on Friday, September 4, 2020 4:23 PM

Government ownership or open access and you can kiss carload traffic goodbye.  You'll only need a network about the size of Amtrak that just connects major cities.  Only major routes for intermodal and maybe some branches for bulk unit trains.  In a way, that's like John Knieling's vision of future railroads.     

Anything that doesn't fit that model will go by truck.  It'll put more freight on the highways.  Not because it moves to a railhead, but because it will bypass the rail network entirely. 

It's a good way to really marginalize the industry completely. I'm surprised Ttrraaffiicc hasn't thought of this and lent his/her support to it.  Although it would fit in with PSR goals, so Wall Street types would love it.

Jeff  

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Posted by Overmod on Friday, September 4, 2020 3:28 PM

BaltACD
 
charlie hebdo
IMO,  a vital infrastructure like rail transportation right of way should be owned by the people of the USA.

Talk about Socialist, that is positively Communist.

You mean Communist like the way a vital infrastructure like interstate superhighways should be owned by the American peo... oh, wait. 

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Posted by BaltACD on Friday, September 4, 2020 3:20 PM

charlie hebdo
IMO,  a vital infrastructure like rail transportation right of way should be owned by the people of the USA.

Talk about Socialist, that is positively Communist.

Never too old to have a happy childhood!

              

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Posted by charlie hebdo on Friday, September 4, 2020 1:56 PM

Overmod

 

 
charlie hebdo
IMO,  a vital infrastructure like rail transportation right of way should be owned by the people of the USA.

 

But not mis-micromanaged by the state bureaucracies of the USA for the ultimate benefit of the political rather than the economic upper classes of the USA.  That's where the careful thinking about things like divorcing Keynesian planning from compulsory taxation become vitally important...

 

 

Correct.  In Europe and elsewhere,  the agencies that manage rights of way and other elements of superstructure are fairly well-insulated from politics and pork barrel considerations.

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Posted by Overmod on Friday, September 4, 2020 1:13 PM

charlie hebdo
IMO,  a vital infrastructure like rail transportation right of way should be owned by the people of the USA.

But not mis-micromanaged by the state bureaucracies of the USA for the ultimate benefit of the political rather than the economic upper classes of the USA.  That's where the careful thinking about things like divorcing Keynesian planning from compulsory taxation become vitally important...

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Posted by zugmann on Friday, September 4, 2020 1:10 PM

charlie hebdo
Pleasing Wall Street [pleasing investors in the capital markets] is what capitalism is. IMO,  a vital infrastructure like rail transportation right of way should be owned by the people of the USA.

Someone sent me a link to a 1996 video about the 20th anniversary of Conrail.  I told him if you played it backwards - you got PSR.  

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

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Posted by charlie hebdo on Friday, September 4, 2020 1:06 PM

Pleasing Wall Street [pleasing investors in the capital markets] is what capitalism is. IMO,  a vital infrastructure like rail transportation right of way should be owned by the people of the USA.

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Posted by BaltACD on Friday, September 4, 2020 12:58 PM

CMStPnP
 
Gramp
So, is this a step towards two North American major railroads? 

The only reason Canada still has two railroads is the government there has an emotional attachment to the CP.   Not sure how that is going to work out with your two railroad plan.

Feature the last two US Class 1's will be CN & CP.

Never too old to have a happy childhood!

              

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Posted by CMStPnP on Friday, September 4, 2020 11:40 AM

Gramp
So, is this a step towards two North American major railroads?

The only reason Canada still has two railroads is the government there has an emotional attachment to the CP.   Not sure how that is going to work out with your two railroad plan.

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Posted by samfp1943 on Thursday, September 3, 2020 10:38 PM

Gramp

So, is this a step towards two North American major railroads?

  Sure sound like the beginning stages of "Choose Your Partners' for the next  round of the Big American Railroad Square Dance !  Whistling  

 [OR Here we go again?] Sigh

 

 


 

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Posted by Gramp on Thursday, September 3, 2020 9:20 PM

So, is this a step towards two North American major railroads?

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Posted by jeffhergert on Thursday, September 3, 2020 8:49 PM

CMStPnP

 

 
SD60MAC9500
Any former C&NW employee can tell you why. 

 

Thats where I heard the name before, weren't they responsible for buying C&NW a while back???

https://www.chicagotribune.com/news/ct-xpm-1989-06-07-8902070375-story.html

Reads like a major capital infusion into C&NW.   I have to say that KCS needs the same capital infusion to complete the NAFTA railway dream, in my view.    KCS still has tracks and routes to straighten out in South Texas in my view.... I don't think they are finished there yet.

 

 

Japonica wanted the CNW for the east/west main.  It was rumored that they intended to sell or junk everything else.  Japonica figured they could, in effect, hold the UP hostage for direct access from Council Bluffs to Chicago.  (On the Wickipedia site for Japonica Partners, it says they were successful and steamlined the company and sold it to Blackstone.  Not quite true.) 

It was the initial hostile takeover that ultimately led to CNW being acquired by the UP.  Before the Blackstone deal (which included UP) was finalized, the UP had taken out an option to buy the Iowa Interstate RR.  Just incase Japonica won the CNW.

After Blackstone won, UP was given conditional trackage right on the east/west main.  If CNW service deteroriated to an agreed upon level, UP could run their trains using their own crews.  (Who probably would've been hired from the CNW ranks.)  It never happened and UP gradually increased their ownership in the CNW.

Jeff

   

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Posted by CMStPnP on Thursday, September 3, 2020 6:57 PM

SD60MAC9500
Any former C&NW employee can tell you why. 

Thats where I heard the name before, weren't they responsible for buying C&NW a while back???

https://www.chicagotribune.com/news/ct-xpm-1989-06-07-8902070375-story.html

Reads like a major capital infusion into C&NW.   I have to say that KCS needs the same capital infusion to complete the NAFTA railway dream, in my view.    KCS still has tracks and routes to straighten out in South Texas in my view.... I don't think they are finished there yet.

 

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Posted by jeffhergert on Thursday, September 3, 2020 10:17 AM

SD60MAC9500
 

 

 
JPS1

 

 
Juniata Man
 Regardless; it's bad news for KCS customers. 

 

Why?

 

 

 

Any former C&NW employee can tell you why. 

 
 
 

I've worked with many CNW people who were around during that era.  Most are now retired.  I also would like to know why?

If it's due to driving off customers and abandoning lines, the CNW did most of that before Blackstone arrived.  It's why the state of Iowa didn't support CNW getting what they did from the RI liquidation in early 1980s.

Jeff 

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Posted by SD60MAC9500 on Wednesday, September 2, 2020 10:14 PM
 

JPS1

 

 
Juniata Man
 Regardless; it's bad news for KCS customers. 

 

Why?

 

Any former C&NW employee can tell you why. 

 
 
Rahhhhhhhhh!!!!
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Posted by mudchicken on Wednesday, September 2, 2020 9:10 PM

Brookfield(G&W)-Brookhaven(Pioneer)-Blackstone(KCS)

STOP IT! (I'm getting connfuzzedConfused too many two syllable Bees)

Mudchicken Nothing is worth taking the risk of losing a life over. Come home tonight in the same condition that you left home this morning in. Safety begins with ME.... cinscocom-west

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