Here is the Ferromex system map from their website.
https://www.ferromex.com.mx/ferromex-lo-mueve-eng/sistema-ferromex.jsp
Here is the BNSF system map from their website.
http://www.bnsf.com/bnsf-resources/pdf/ship-with-bnsf/maps-and-shipping-locations/bnsf-network-map.pdf
BNSF has their own track into both Winnipeg and Vancouver, so could claim some limited "Canamex" corridors with Ferromex interchange at El Paso.
But of course, in Canada the big ballgame is the corridor stretching from Windsor through Toronto to Montreal to Quebec City, and CPKC definitely would have the edge there.
beaulieu SD60MAC9500 CN must be scared? Hardly... Even if CP ends up with KCS. CN still has the superior network. CN-UP can offer faster more efficient interline service in the NAFTA Corridor than CP+KCS. Aside from that point. CN+KCS is a better fit in my opinion. Not to mention CN and KCS interchange a sizable chunk of IM traffic at Jackson, MS. However whether CP or CN get KCS. Both systems will have a major gap in their network. That gap is the CANAMEX Corridor running between the gateways of Nogales, AZ, EL Paso, TX, through Sweet Grass, MT, and Blaine, WA. BNSF has the best CANAMEX route between El Paso-Sweet Grass. If we ever get a rail line constructed between Las Vegas and Phoenix, UP between Nogales and Eastport can become a more direct transit routing. And to what Canadian railway company does UP at Eastport and BNSF at Sweetgrass connect to?
SD60MAC9500 CN must be scared? Hardly... Even if CP ends up with KCS. CN still has the superior network. CN-UP can offer faster more efficient interline service in the NAFTA Corridor than CP+KCS. Aside from that point. CN+KCS is a better fit in my opinion. Not to mention CN and KCS interchange a sizable chunk of IM traffic at Jackson, MS. However whether CP or CN get KCS. Both systems will have a major gap in their network. That gap is the CANAMEX Corridor running between the gateways of Nogales, AZ, EL Paso, TX, through Sweet Grass, MT, and Blaine, WA. BNSF has the best CANAMEX route between El Paso-Sweet Grass. If we ever get a rail line constructed between Las Vegas and Phoenix, UP between Nogales and Eastport can become a more direct transit routing.
CN must be scared? Hardly... Even if CP ends up with KCS. CN still has the superior network. CN-UP can offer faster more efficient interline service in the NAFTA Corridor than CP+KCS. Aside from that point. CN+KCS is a better fit in my opinion. Not to mention CN and KCS interchange a sizable chunk of IM traffic at Jackson, MS. However whether CP or CN get KCS. Both systems will have a major gap in their network. That gap is the CANAMEX Corridor running between the gateways of Nogales, AZ, EL Paso, TX, through Sweet Grass, MT, and Blaine, WA. BNSF has the best CANAMEX route between El Paso-Sweet Grass. If we ever get a rail line constructed between Las Vegas and Phoenix, UP between Nogales and Eastport can become a more direct transit routing.
What Mexican Railway connects with UP at Nogales, AZ and El Paso, TX? what Mexican Railway Company connects with BNSF at El Paso? Not KCSM.. The point stands whoever gets KCS will not have a CANAMEX Corridor...
adkrr64 If the shipper signed that contract, we can presume they felt there was a benefit to them for doing so, despite the restrictions.
If the shipper signed that contract, we can presume they felt there was a benefit to them for doing so, despite the restrictions.
They are not next to a CP line, and even monopolized rail service is still cheaper than trucking in this case.
Greetings from Alberta
-an Articulate Malcontent
blue streak 1SD70 that CN contract sures sounds like a monopoly action. No wonder RRs have such a bad name ?.
If the shipper signed that contract, we can presume they felt there was a benefit to them for doing so, despite the restrictions. Trucks should provide the competition to keep rates reasonable, though without knowing what they are shipping (or receiving), trucks may not necessarily be a practical or desirable alternative.
SD70 that CN contract sures sounds like a monopoly action. No wonder RRs have such a bad name ?.
SD70 that N contract sures sounds a monopoly action. No wonder RRs have such a bad name ?.
beaulieu SD70Dude I had the opportunity to look at a agreement between CN and a smaller customer within the past year. It contained language prohibiting the shipper from using the interswitching provisions. No surprise if the agreement locked CN into a good rate, plus the agreement likely had an ending date which would free the customer to again use Interswitching or sign a new agreement with CN if it suited the customer.
SD70Dude I had the opportunity to look at a agreement between CN and a smaller customer within the past year. It contained language prohibiting the shipper from using the interswitching provisions.
I had the opportunity to look at a agreement between CN and a smaller customer within the past year. It contained language prohibiting the shipper from using the interswitching provisions.
This agreement was for the installation, use and maintenance of the customer's switch and spur. As per normal practice CN pays for the maintenance of the switch, and the customer pays for anything and everything else. There was no discussion of rates.
Here is the relevant article of the agreement:
"It is an essential condition of this Siding Agreement that all rail traffic shipped to and from the Siding is exclusive to CN. The Industry shall ensure that all inbound and outbound carload traffic from the Siding shall be transported the greatest possible direct distance over the lines of CN`s railway system, including subsidiaries and affiliated companies of CN. Any traffic that requires the participation of another rail carrier shall be interchanged at an interchange location to be determined exclusively by CN. For greater clarity, in consideration of the permission granted to CN to use the Siding, the Industry agrees that it will not use long-haul Interswitching, Open Gateway Rates (OGRM) or any other similar regulated remedy for traffic coming in or out of the Siding. Without limiting any rights or other remedies at law or under this Agreement, the Industry shall remain liable to CN for all lost linehaul revenue resulting from third party use of the Siding for regulated interswitching access pursuant to the Railway Interswitching Regulations, long-haul interswitching, OGRM or any other remedies of this nature established by Parliament."
beaulieu How many people on here think the CN lawsuit against the STB is more of a preemptive move against the STB over likely conditions on a KCS acquisition rather than the failure to buy the Massena Line?
How many people on here think the CN lawsuit against the STB is more of a preemptive move against the STB over likely conditions on a KCS acquisition rather than the failure to buy the Massena Line?
Suing the regulatory body that regulates your industry and whose stamp of approval you require from time to time doesn't strike me as very smart, but that's just my take on it.
Based on my familiarity with CN contracts, the business covered by the contract was almost certainly already committed to CN which would automatically preclude the customer using interswitching for that particular business.
CN likely included the prohibition to use interswitching to guarantee that any new business - not covered by the contract - was theirs as well. I'd liken this to a "most favored nation" clause.
CW
beaulieu No surprise if the agreement locked CN into a good rate, plus the agreement likely had an ending date which would free the customer to again use Interswitching or sign a new agreement with CN if it suited the customer.
No surprise if the agreement locked CN into a good rate, plus the agreement likely had an ending date which would free the customer to again use Interswitching or sign a new agreement with CN if it suited the customer.
SD70Dude And yet Teck still jumped at the first opportunity to route their coal trains off CP.
And yet Teck still jumped at the first opportunity to route their coal trains off CP.
And I would expect that was because CN offered a lower rate. Service could not be the major problem as if CP's service was bad before, it is unlikely to suddenly improve between the mines and Kamloops, a significant distance.
SD70Dude Even most coal trains from the Elk Valley mines (served exclusively by CP) are now interchanged to CN at the first opportunity.
That didn't happen until the Canadian Government introduced a little regulation called "Long Distance Interswitching" whereby a customer could appeal on a case by case basis to have the Canadian Transport Agency set a rate from a captive customer to an interchange point on a competitor where the distance is 1500 km or half the distance of the shipment whichever is greater. This only applies in Canada, but is part of the way to Open Access. What this means is that if you are a large enough shipper, or you are politically connected, you are not a captive shipper.
daveklepper If CN is turned down on the voting that the merger with CN trust proposal, won't that an indicationwill not be approved?
If CN is turned down on the voting that the merger with CN trust proposal, won't that an indicationwill not be approved?
UlrichI'm not really sure how a change in ownership would "unlock" that much value to shippers.
Ever hear the one about 'where are the clients' yachts'?
Changes in the distribution among the owning classes only involves having to devote an additional share of revenue to paying off the old owners. As with the workers, the customers get it in the neck, for no perceivable value in and of itself.
charlie hebdo has gone over about all the arguments why vertical integration ought to be desirable; some of those cover whatever might be applicable for horizontal integration. In my opinion these latter (for CP/KCS) are relatively small compared to tight and effective coordination; they are much smaller still compared to the financial assumption of cost for the acquisition.
On the other hand, the prospective tax savings for the merged entity in the Democratic near future might all by itself go a long way toward justifying the action...
A potential consideration might be access to capital. A merged entity might have access to sources and terms that KCS currently can't command.
Having used both CN and CP to originate traffic that was then interchanged to KCS at Jackson and Kansas City respectively, I always found the interchanges to operate pretty seamlessly and this goes to Ulrich's comment - why merge when cooperation might work as well. Our service over the CN/KCS route was a bit better than via CP/KCS but, I doubt a merged CP/KCS would result in a measurable improvement.
I can't comment on what through rates over a CP/KCS or CN/KCS route might look like as I always ran Rule 11's for our traffic but, from experience with through rates with other carriers, disagreements can generally be condensed to one wants a bigger chunk of the pie than the other. If the two can't come to an agreement, the potential traffic will simply be declined or, priced so high the customer opts to truck.
As to justification for a merger; once completed, the surviving entity gets 100% of the pie and generally will jack rates on captive traffic to make still more money. And service will normally degrade - initially because of issues related to integration of the two railroads but, when service recovers, it never seems to recover to where it was before the merger. In other words, the new bar is lower.
I'm not really sure how a change in ownership would "unlock" that much value to shippers. The tracks and infrastruture are there now. Everyone runs the same model locomotives today.. the same rules apply to all carriers. A merger might eliminate some duplicate administrative functions.. But why not avoid the purchase process and instead coordinate marketing and ops functions? No regulatory approval required.. have CN, CP and KCS develop a joint marketing initiative that best utilizes all three railroads... the KCS and CP combo might work best for some work while a KCS CN combo would work best for other stuff.. This would also allow other railroads, NS and CSX, to develop their own customized marketing and ops plans with KCS.
SteamRoller88 CN not helping it's case. I'm rooting for the underdog CP. Everyone likes a good bully getting defeated.
CN not helping it's case. I'm rooting for the underdog CP. Everyone likes a good bully getting defeated.
CP only has themselves to blame for any predicament they are currently in.
They managed to lose traffic to CN even during our Hunter Harrison years, left themselves open to a hostile takeover, and then hired Harrison to try and drive even more traffic away.
We at CN have some access to CP's CTC overviews. Their Canadian main line is pretty dead compared to ours. Even most coal trains from the Elk Valley mines (served exclusively by CP) are now interchanged to CN at the first opportunity.
I've heard speculation that CN doesn't really want to buy KCS (at least not at this time), but they REALLY don't want CP to get it. So they are trying to make CP's life as hard as possible.
Who knows where this goes. Perhaps it will have a similar ending as the CSX-NS Conrail split.
Back in the Conrail era, a derailment occurred at CP237 on the Chicago line. That's virtually in front of Utica (NY) Union Station.
The derailment took out the crossovers at the CP. CR didn't replace them, as at the time there was the possibility of (I believe) the Suzie Q to the south working with whoever was running the line north (now MA&N, with the Adirondack), and they didn't want that to happen.
That's my limited knowledge of the topic, but it does carry the frame of mind CSX seems to have with the Massena Line...
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...
MidlandMike Now that CN is suing the STB over a minor issue in the Massena, NY line acquisition, I can't see anything going smoothly over their KCS application. https://www.trains.com/trn/news-reviews/news-wire/cn-sues-federal-regulators-over-decision-on-sale-of-csx-massena-line/
Now that CN is suing the STB over a minor issue in the Massena, NY line acquisition, I can't see anything going smoothly over their KCS application.
https://www.trains.com/trn/news-reviews/news-wire/cn-sues-federal-regulators-over-decision-on-sale-of-csx-massena-line/
I think the problem with the Massena Line is actually CSX. They don't want to let CN get access to either of those two shortline railroads.
Recall that NYSW is cleared for doublestacks. If I recall correctly, NYSW was hauling doublestacks over Sparta Mountain and in to the Little Ferry terminal for Conrail because Conrail's route had clearance restrictions. NYSW was pulling those doublestack trains with former BN SD45s and F45s.
(Check out this DVD cover on Amazon on NYSW doublestacks)
https://www.amazon.com/Chasin-Stacks-Susquehanna-Double-Trains/dp/B004P0KRPY
If CN gets interchange access to NYSW, they could work out a haulage agreement or a trackage agreement, or even buy NYSW to get their own direct route into the Greater NY Area. They could bring doublestacks from Halifax and Port St John directly in to the Greater NY Area.
Likewise, Finger Lakes connects on its south end with the Norfolk Southern Southern Tier Line. CN could interchange traffic with Finger Lakes, or buy Finger Lakes and interchange traffic with Norfolk Southern.
Either the NYSW Route or the Finger Lakes Route would be very competitive with CSX and just might be a shorter faster overland route to the Greater NY Area because of going overland from Syracuse, sort of "one side of the triangle". On the other hand, CSX has to go along "two sides of the triangle" from Syracuse to Selkirk and then a 90-degree turn down the west side of the Hudson River.
CSX does not want any of that potential competition to happen because of the sale to CN. They want to keep CN "captive" for traffic coming down the Massena Line that is destined to the Greater NY Area.
SteamRoller88CN not helping it's case. I'm rooting for the underdog CP. Everyone likes a good bully getting defeated.
Between the two railroads. CP has better community and shipper relations as well as better relations with Amtrak to boot. So my bets are on CP. I like to think of it as the injection of all those former Milwaukee Road employees that were so friendly to me as a kid. :)
Hopefully KCS remains independent.. they're valuable to everyone, and can establish marketing agreements and operating synergies with all other carriers. If the STB is serious about maintaining a competitive landscape they'll see that.
beaulieuThe part about merging with one of the Eastern Lines is very doubtful, The STB would block any such attempt,
I just thought they might consider a bit of leeway, you know ...with everyone having to cope with the pandemic, and stuff.
BaltACD Ulrich At least they're nolonger fixated on the OR or PSR... now acquiring the KCS is the holly grail.. because there are no other opportunities out there to be had. In my reading of the STB's tea leaves - KCS is not a opportunity for CN.
Ulrich At least they're nolonger fixated on the OR or PSR... now acquiring the KCS is the holly grail.. because there are no other opportunities out there to be had.
In my reading of the STB's tea leaves - KCS is not a opportunity for CN.
My point is that ther KCS is not the only opportunity out there (regardless of how the STB views CN's interest in KCS).
I always thought if there would have been one US Class I that could have made it through the STB gauntlet and merged with KCS, it would have been thr smallest of the big four - Norfolk Southern.
It would have been end to end at KC, the Meridian Speedway, and New Orleans.
It would have maintained three competitors to Mexico.
It would have brought a third competitor to the Dallas-Chicago lane and a second competitor to the Gulf-Chicago lane and another competitor on the Gulf-Detroit to Ontario lane.
Norfolk Southern would have needed visionary leadership of the type that CP and CN have. And some courage to be audacious.
It would have spurred NS on to greater heights!
Water over the dam now.
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