kgbw49 Not to mention Birmingham, Atlanta and Charlotte as well as Jacksonville.
Not to mention Birmingham, Atlanta and Charlotte as well as Jacksonville.
I didn't mention those points due to the fact NS and KCS have been interchanging freight from Mexico via Meridian, MS. for sometime now.
The greater market penetration will be in the Midwest-Mexico corridor.
So if CN wins KCS then some say would combine with NS or CSX.
How does that change the dynamic? How much more wheat and grain ends up in the Eastern US compared to what already does? How much ethanol and oil end up in the Eastern US compated to what already does? How much intermodal from Vancouver ends up in the Eastern US compared to what already does? Would CP combining with CSX or NS really change the overall dynamic that much?
I am just asking these questions for the sake of discussion and to hear what others are thinking.
Perhaps a Conrail type split is in order....
CP takes Kansas City south
CN takes the Meridian Racetrack, regaining their old property (IC Shreveport line). Spin off the KCS branch line ops in Mississippi to a regional operator.
Joint operation into Mexico.
No one is a big winner, but both gain Mexico access. Let the competition begin.
ed
In the unlikely event that CN wins the bid to take over the KCS CP will be left as the smallest class 1 by far and the odd man out.
When all is said and done there will be two railraods in the USA
CN & CP
Never too old to have a happy childhood!
Say CN gets KCS. There may be some small concessions to NS or CSX or both to ensure no loss of two shippers for those who have them.
CP then combines end to end with CSX or NS. CP only really overlaps either one of those between Chicago and Detroit and even then only by trackage rights.
I am not sure how that changes things significantly. How much more traffic would go from Western Canada to the Eastern US compared to what already does, or from Eastern Canada to the Eastern US for that matter?
Would that really trigger a final consolidation?
What if all class I RRs divided KCS. Who would get what?
kgbw49 I would expect either CSX or NS or both would want to step in to the shoes of KCS or CN in the Baton Rouge-New Orleans corridor to ensure a second carrier in that area.
I would expect either CSX or NS or both would want to step in to the shoes of KCS or CN in the Baton Rouge-New Orleans corridor to ensure a second carrier in that area.
NS should throw a bid out for KCS. NS would be the next best suitor for such a combination. NS would also allow greater Midwest/Mexico destinations with traffic origin/terminating points such as; Detroit, Toledo, Columbus, Indianapolis, Ft Wayne, Louisville.
Would give CSX a route to Mexico and to KC
Trackage rights are a poor way of preserving competition. D&H received trackage rights into the NEC in the Conrail merger but provided almost no real competition to Conrail.
This is getting interesting. CN can clearly offer more direct routes and faster service from KCS to major markets. However, it is also true that CN already reaches the gulf coast and is much larger than CP. If CN-KCS forces CP to look for another partner, it will be very destabilizing.
I would suggest that KCS stockholders require an immediate cash-only sale with a voting trust if they accept CN's offer. This would put the risk of rejection on CN as KCS shareholders would already have their money. I would expect the rest of the industry to line up against a CN-KCS merger.
Could CN & CP come to an agreement? If the STB uses the new rules, competition will need to be increased by the merger, not merely preserved. Is there a way to divide KCS so that both railroads could offer single line service to Mexico? It would take a lot of trackage rights or jointly owned track.
My thoughts with the larger CN offer is to file a comment with the STB against CN getting a voting trust, and then wait to see what if anything the STB requires of CN as a merger condition. CP should have required KCS to pay them a significant sum of money to allow them to walk away from the deal. IF CP didn't put such a requirement into the purchase agreement then they are idiots.
azrail I wonder if Berkshire could make a bid.
I wonder if Berkshire could make a bid.
CP does not presently operate in Louisiana, while both CN & KCS do, with rail yards near each other in New Orleans & Baton Rouge. Several railway shippers have access to both KCS & CN, which might lead to some reduction in competition, at least in SE LA.
from the Far East of the Sunset Route
(In the shadow of the Huey P Long bridge)
To much overlap.
An "expensive model collector"
Will CP counter offer?
Business news: CN has offered a higher per share price for KCS/KSU @ $33.7B vs CP's offer of $26B...
LARGuy, that is a lot of traffic for that line. It is not nearly the high speed line of the BNSF on the other riverbank, as you know. This should prove interesting!
Back in the day when DME purchased IMRL, they put some significant resources towards upgrading the former MILW from Owatonna, MN down to Austin, MN. That gave them a through route all the way to Chicago.
Once finished, DME routed the bulk of their traffic down that line to connect with the former MILW Iowa line at Nora Springs, IA, rendering the former CNW through Rochester, MN almost an afterthought.
If one drives north to Minneapolis from Owatonna on I-35 you can see the former MILW roadbed intact from Owatonna to Faribault. I believe CP still has trackage rights on the UP Spine Line from Northfield to St Paul.
It is almost too bad the gap exists between Owatonna and Northfield on the former MILW.
VerMontanan Y We'll see how the CP does with the long haul of the bitumen from Alberta, which costs a lot of money to extract. Shippers determine the routing and CP's railroad from River Jct. (La Crescent, MN) to Kansas City doesn't have a lot of capacity,
Y
We'll see how the CP does with the long haul of the bitumen from Alberta, which costs a lot of money to extract. Shippers determine the routing and CP's railroad from River Jct. (La Crescent, MN) to Kansas City doesn't have a lot of capacity,
Once we get new sidings put in at Brownsville, MN and (most likely) near Bellevue, IA along with CTC installed, the Marquette Sub mainline will have good capacity. It typically sees anywhere from 8-15 trains on a given day anyway right now.
Heck, if CP bought Wheeling & Lake Erie next they would just about have an Alphabet Route with the trackage rights to Lima on CFE. Get out the checkbook! Yeah, right.
I have to admit I am not sure if it ever took off. The service was announced (in 2019 or so?) with great fanfare by CP.
This network map from 2020 has Jeffersonville and the CFE trackage rights on it:
https://www.cpr.ca/en/choose-rail-site/Documents/cp-network-map-2020.pdf
Is CP moving intermodal to the Southern Ohio area? At one time it was planned that service would be via CFE in Chicago. I live a few miles from CFE in NW Indiana and have not seen any intermodal on the CFE.
CP does service the North Baltimore CSX intermodal terminal. CSX operates CP trains 142/143 between Schiller Park, Il and Montreal. These are CSX trains Q166 and 165. These appear to work at North Baltimore with drops of containers, at least on the EB moves.
Has this perhaps substituted for the CFE service? Perhaps I need to go watch the CFE trains.
It is interesting how CP, prior to this new merger proposal, was piecing back together the Midwestern extensions of the Milwaukee Road that were spun off by prior CP management teams.
IMRL was, of course, all Milwaukee Road. And while not quite the Louisville extension, the CP trackage rights deal for intermodal in to southwestern Ohio somewhat mimics the Louisville extension in that it is an attempt to serve the lower Ohio River Valley, as well as central Ohio, of course.
Then add in the buy back of former CP trackage in Maine (CM&Q) and CP has spent a lot of money buying back routes it once owned.
However, I would suspect they have kept the paper corporations intact so they can continue with the lower-cost operating structure on those line segments.
Hey Murphy! Life is good (except for the Canucks lol).
Mark, thanks for that link!
Yes, welcome back, Dale. The Keystone XL situation might have made this the right time to make this announcement, but this was in the works ever since CP doled out $1.48 billion for the DM&E and IC&E in 2008. At the time, there was speculation that CP wanted DM&E to access coal in the Powder River Basin, but for the same reason that no one stepped forward to finance the DM&E expansion into the PRB, CP had such desire. With CP's "route envy" of CN firmly in place, the prize was the line to Kansas City and coveted KCS interchange. The Great Recession happened in 2008, so that probably delayed CP's interest in KCS, as well as needing to spend capital on infrastructure across North Dakota and Minnesota due to the Bakken Boom. CP jettisoned most of the DM&E in 2014.
We'll see how the CP does with the long haul of the bitumen from Alberta, which costs a lot of money to extract. Shippers determine the routing and CP's railroad from River Jct. (La Crescent, MN) to Kansas City doesn't have a lot of capacity, and the KCS is a lot steeper between Joplin, MO and Mena, AR than the BNSF alternative (BNSF had been getting these trains from CP at Noyes, MN in years past). At least on BNSF, most North Dakota crude is going west.
An interesting take on the "KXL": https://www.oilsandsmagazine.com/news/2021/1/23/ten-reasons-why-keystone-xl-doesnt-matter-so-much-any-more
In September, 2020, I visited Gascoyne, ND where a huge amount of KXL pipe is stored. The pipe has been there for at least 5 years, and arrived by rail (BNSF's ex-MILW main line between Aberdeen and Terry). Gascoyne was once the location of a lignite (shitty coal) mine that shipped to the Big Stone City coal plant at Big Stone City, SD. The power plant is still there (uses Powder River Basin coal now), but no trace of the lignite "mine" which was just a strip. The loop track is still there, and the pipe is piled next to it, visible on Google Earth:
https://www.google.com/maps/@46.1250077,-103.0567691,1483m/data=!3m1!1e3
Mark Meyer
nanaimo73 Hey Ed, good to see you! John, my thought would be that CP now knows Keystone XL is dead, and they see the opportunity to increase shipments of Alberta and North Dakota oil to Texas.
Hey Ed, good to see you!
John, my thought would be that CP now knows Keystone XL is dead, and they see the opportunity to increase shipments of Alberta and North Dakota oil to Texas.
Thanks to Chris / CopCarSS for my avatar.
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