• CANADIAN NATIONAL ENTERS BIDDING WAR WITH CANADIAN PACIFIC FOR KANSAS CITY SOUTHERN

  • For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.
For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.

Moderator: Jeff Smith

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  by John_Perkowski
 
Norfolk Southerns western terminus is the old Wabash yard in north Kansas City.

BNSF and UP are the powerhouse roads in KC. BNSF serves Houston on its own rails. UP serves on an amalgamation of MoPac and SP rails.

This merger creates another direct route to the ports.
  by eolesen
 
If you're calling out Mopac and SP, then technically, BNSF is accessing Houston on the Fort Worth and Denver, no? ;)

Sent from my SM-G981U using Tapatalk

  by JayBee
 
eolesen wrote: Wed Apr 07, 2021 1:38 pm If you're calling out Mopac and SP, then technically, BNSF is accessing Houston on the Fort Worth and Denver, no? ;)
I think he is making a subtle distinction between UP, which acquired SP and MP, and BNSF, which was a merger where neither predecessor survived in name, but both had access to Houston before the merger.
  by Gilbert B Norman
 
Of interest will be to what extent will a merged CP-KCS be interested in rebuilding the MILW La Crescent-Davenport "River" line?

Suffice to say, when I "pulled the pin" at the MILW end of '81, that line was one "slow order" atop another. Only local traffic used it; what Twin Cities-KC business had was routed through Chicago, thence West on the D&I (latter day post-'55 route of "The Cities") to Sabula. Since then, the line has gone through two successive Short Line ownerships, including first conveyance to the SOO along with anything of the MILW that mattered, two Short Lines, and finally reacquired by the SOO (dba CP).

I have no idea what FRA Class the line is today, but I'll throw a dart and it lands on Class 2 (25mph).

I would think that a combined SOO(CP)-KCS will have much more traffic to handle Twin Cities-Kansas City than SOO enjoys today, and in turn would be looking at least at Class 3 (40mph), and even Class 4(60). True, the RI-CNW-UP (route of the "Twin Star Rocket") christened the "Spine Line" by some consultants "overrunning CUS" post-Bankruptcy, is the most direct route, but rehabbing the River Line would be a step in the right direction for SOO-KCS.

Finally, what I find hard to believe is how the passenger train advocacy community thinks less traffic through Chicago, more slots for passenger trains; and "the Topper"; might a SOO-KCS merger precondition be reinstating the KC-NO "Southern Belle"? KCS was "out" well before A-Day lest we forget.
  by Shortline614
 
The new CPKC will certinly have to upgrade all of the former MILW line from Kansas City to the Twin Cities to handle new merger related traffic. I belive that the track was Class II (25 mph) when it was still the IC&E but was upgraded to Class III (40 mph) when CP took over in 2008. CP has said they will be spending 50 million to upgrade to line to handle merger-related traffic. That seems low to me. However, the line does seem to be qutie underutilized, so this number might just be accurate.

What I find the most interesting is what will be CN's response to this? In the late 90s, CN begain their blitz into the United States. First buying up the Illinois Central gain access to the Gulf of Mexico. Then they purchaced the Wisconsin Central, Great Lakes Transportation, and Elgin, Joliet & Eastern to create an "Iron Lariat" around the Great Lakes. Turning what was a string of secondary lines into a major freight corridor that made the other railroads jelous. CP's response was underwhelming. Buying the DM&E-IC&E system for far more than it was worth. The tower of cards had to collapse enventually. It finally did when Fred Green was booted out of the door, and Hunter Harrison came in and worked his magic. Hunter tried to buy NS which didn't work. Then he went to CSX, leaving Creel in charge.

Creel then told the marketing department "Give me 500 million in new carload traffic." That 500 million that Creel thought was possible turned into 2 billion in new revenue for the company. CP now had money to throw around on acquisition that could "close the gap" with CN. First, the Central Maine & Qubec was purchaced, giving CP acess to the Maratimes that they surrendered to CN 30 years ago. Second, the Detroit River Tunnel. (Sidenote: I belive this acquisition to be a precustor to some kind of joint venture closing the Chicago-Detroit gap.) Now, Kansas City Southern, which gives CP what CN has had for 20 years and more. This doesn't even mention rumors about CP buying lines in the Pacific Northwest. (https://www.railwayage.com/freight-fore ... annel=home)

If CN was the winner of the 2000s, then CP is the winner of the 2010s, and possibly the 2020s as well. CN, the old winner, will have to respond somehow. What that response is? I don't know. Merger with another Class I? Buying trucking companies in the US? Something else entirely?
  by Gilbert B Norman
 
One CANADIAN road (OK; a US subsidiary) controlling all N-S access to/from the Gulf?

That will not stand!
  by Pensyfan19
 
Is there any way, if this bidding continues, that KCS could continue to operate independently without either railroad purchasing them?
  by Jeff Smith
 
ConRail redux: CSX vs NS
  by Gilbert B Norman
 
Another factor to consider; possibly Topper, Uncle, and Warren will all be happy about.

Kansas City would remain open; no need for a Surfboard imposed "open gateway" dictum. After all, how would CN forward traffic beyond KC on their own - even "friendly" - rails?

But on the "flip"; what if CN diverted all KCS Gulf, and Mexico, traffic through Shreveport and on to the IC for haulage to the North? The "already not too favorable topography" could easily relegate the KCS Shreveport-KC to an FRA Class 3 branch line.
  by Ridgefielder
 
Seems to me CN is going to have a much higher regulatory hurdle here than CP. CP+KSU is almost the perfect end-to-end merger, w no overlap in route structure. They only even touch in KC. Same can't be said for CN/IC+KSU.

Also given the current occupant of the White House I wonder if CN's less-than-stellar history w Amtrak could be a factor...
  by Gilbert B Norman
 
Mr. Ridgefield, if CN were to route traffic off the KCS at Shreveport and on to the IC for the favorable grades, then that line would be more congested and adversely affect Amtrak operations.

But I think "a bit early in the game" to express any such concerns - especially for a CN-KCS combination that neither you or I think is going anywhere.

Finally, anyone think that Warren is going to sit passively by as whatever Mexican traffic he participates in is jeopardized?
  by JayBee
 
Gilbert B Norman wrote: Tue Apr 20, 2021 10:12 am Mr. Ridgefield, if CN were to route traffic off the KCS at Shreveport and on to the IC for the favorable grades, then that line would be more congested and adversely affect Amtrak operations.

But I think "a bit early in the game" to express any such concerns - especially for a CN-KCS combination that neither you or I think is going anywhere.

Finally, anyone think that Warren is going to sit passively by as whatever Mexican traffic he participates in is jeopardized?
Why would Uncle Warren buy a Banana (KCS), peel the banana, throw away the banana and eat the peel. First BNSF would have to best CN's bid, second the STB would likely require BNSF to divest most of KCS' US routes as BNSF duplicates most of it. At that point if I was CP I would make a very lowball offer for the portions of KCS that I was still interested in. IF the STB were to set a price higher than what I offered I would walk away. Then I would look to UP to be my primary Gulf Coast connection.

BTW - CN also connects to KCS at Springfield, IL with KCS's ownership of a chunk of the former GM&O Kansas City line.

I hope that CP was smart enough to get a substantial break-up agreement as part of the acquisition agreement.
  by Shortline614
 
Some quick thoughts:

1. CPKC is a end-to-end merger. The two component railroads, CP and KCS, only connect at Kansas City. CN-KCS is not. There are corridors where competition would be reduced such as St. Louis-New Orleans and Baton-Rouge. The latter is particularly troublesome, since there are several big chemical plants that are served by both railroads. One solution to this is to grant CP (or another railroad) trackage rights down the entire length of the Illinois Central and around New Orleans. I don't know if the STB would approve of this solution, however.

2. If CN-KCS goes though, what will CP's reaction be? Merger with UP? That may sound crazy but I think everything is on the table at this point. Where does that leave BNSF? CSX? NS?

3. CN was one of the railroads to argue before the STB that CPKC should follow the post-2001 merger rules, so a CN-KCS merger would have to go by those rules. This doesn't phase CN, but it does make a complicated merger more complicated.

4. Here is a question: what railroad has the stronger balance sheet? I believe it's CN. This is important in a bidding war. NS vs CSX over Conrail anyone?
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