CP Rail and the Conrail breakup

<Posted also on the Conrail page>

When CSX and Norfolk Southern were working to divide Conrail, why didn't CP Rail look to get more out of the breakup. It seems almost logical if they own the D&H to get the entire Southern Tier line to connect to the TH&B and have their own route to the Port of N.Y. It seems also logical to try to get their own line across Michigan to Chicago. CP could have even looked to effectively connect the Soo Line with the D&H across Ohio and Indiana using the old PRR main line. Does anyone know if they attempted such concessions from CSX and NS? There certainly was enough track to go around and still allow CSX and NS to get what they wanted from the division of Conrail.

good points. it seems like cp should have gotten the tier since they have haulage rights on it now with the ns.

But CP didnt buy Conrail..NS and CSX did.
then NS and CSX divided up Conrail among themselves..
why should they give (sell) a valuable line to a 3rd competitor?

This wasnt the same situation as when Conrail was first created in 1976, when the US govt attempted to avoid monopolies and preserve competition, by giving traffic rights to the D&H..In 1999 it was two US Railroads buying another US railroad..
NS and CSX were (are) already in enough competition between each other, I dont see any reason why they would add a third massive Class 1 into the mix, which would just create more competition for themseves..

Not transferring the Southern Tier main to CP was simply a good business decision.

Scot

good business decision? didn't guilford buy the d&h out of bankrupcy for $500k?? i believe pan am has it on the books for millions. although i don't understand the accounting nor tax treatment for the gain. seems cp was not interested in adding a loser. i'm thinking the jua will be profitable for d&h and that ns will buy it near term. am i wrong?

ken patrick

It would have made sense for CP Rail and CN to have purchased the eastern EL and the LV for New York City access, and for CP to have picked up the Michigan Central to reach Chicago on its own. That none of those scenarios happened is a big win for American rail interests, because it kept Canadian traffic to New York squarely dependent on Conrail, and to a lesser extent CSX and NS.

Put another way, imagine if CP Rail had access over the Tier to New York Harbor, and that CN had purchased the LV for its own access. Not only would Conrail have suffered a major loss in business from Canadian lines exchanging traffic at Buffalo and Chicago, but the Canadian lines would also be able to attract much more land-bridge business at Vancouver and Prince Rupert by offering a single line-haul to the busiest harbor on the Eastern Seaboard, not to mention one of the largest markets for Asian consumer goods. That lucrative business would come at the expense of Santa Fe, Southern Pacific, Union Pacific, and the Burlington Northern. Making them go through Conrail, NS or CSX kept the American lines in the running and made Seattle, Portland, San Francisco and especially Los Angeles more attractive ports.

CP/D&H had an option to purchase the Tier to Buffalo as part of the D&H trackage rights agreement, or a subsequent agreement, and tried to excercise it in the 1990s prior to the breakup. Conrail ended up not letting them do it, but that was the beginning of a series of upgrades to the line which resulted in the end of just about all the remaining semaphores, the upgrade serving to pacify CP.

It would have made more sense for CN to buy the NYS&W and the CR Montreal Secondary and have their own route into the New York market.... the way the DO was split up between CSX and NS (and Walter Rich) was done expressly to prevent that from happening.