Railroad Forums
Moderator: Jeff Smith
Gilbert B Norman wrote: ↑Wed May 26, 2021 12:41 pmAssuming the STB won't let CN keep both the KCS connection to the gulf and the IC connection to the gulf the question becomes which would be more valuable in the long term and which could be sold off for more money.Calgary-based CP would be the likely buyer of those CN lines – CP’s network also runs through Chicago. So, the new map of North American railways would feature CP gaining access to the Gulf of Mexico, while CN extended its reach across Mexico.If there is to be a CN-KCS combination, I wouldn't rule out a divestiture along these lines. However, I would think the line "on the block" would be the KCS. CP already has the MILW, Mpls and Chi-KC and absent such a divestiture, KCS could easily become an FRA Class 2 secondary line.
Gilbert B Norman wrote: ↑Fri May 21, 2021 5:53 am Loonies talk louder than balanced competition.Not really. SPSF is the big example, but there are few lessor known ones. When GTW, SOO, and the C&NW were battling over the remains of the MILW in the 80s, C&NW offered the highest bid. Despite this, the bankruptcy trustee awarded the MILW to the SOO to create two 'balanced" rail systems in the Upper Midwest. UP and BN engaged in a bidding war over the ATSF in 1994. UP had more money, but eventually lost the will to fight and we all know what ended up happening.
Gilbert B Norman wrote: ↑Thu May 27, 2021 9:24 am Mr. Shortline, somehow when I addressed Loonies, I was thinking how the Canadian regulatory agency, Transport Canada, permits CN to "own" both Halifax and Prince Rupert. Somehow, the paucity of "berths" confronting shipping at present means the maritime companies have little choice other than to call at either.That makes more sense. I guess the same "loonies" that allow CN exclusive access to Prince Rupert and Halifax might have a similar line of thinking to those who allow CSX exclsive access to places such as Tampa. CP and NS both have this problem where they serve less ports than their competitors. Just compare how many gulf ports CSX serves vs NS.
Gilbert B Norman wrote: ↑Thu May 27, 2021 9:24 am So to close back on topic, if CN-KCS is to come to pass, and "Lakes to Gulf" is what it's all about (Mexico a "sideshow" considering the political instability and that "the curtain could fall" in twenty or so years with the government - assuming they even have one - getting back in the railroad business), CN will have to divest either the KCS-L&A or the IC. As noted, my bet will be the KCS. Let whoever deal with the "over hill over dale" KCS topography, and we will just "roll 'em on down to the sea".I don't think "Lakes to Gulf" is what it's all about for CN. With the execption of the Kansas City-Detroit "Speedway," all talk from CN i've seen has concerned Mexico. As for CP, I would say it's both a Mexico and a Gulf play. It's a Mexico play because of the massive amount of Mexico-Midwest traffic that is currently going over the road instead of rail, and it's a Gulf play becase CP doesn't have lines south of Kansas City. I am agreement on you that CP will ask for the Kansas City-Shreveport-New Olreans line, and the STB will give it to them. Prehaps that is the only way that CN-KCS doesn't end up with the D&ME-IC&E being "reregionaled."
JayBee wrote:CN and KCS have already announced that they would be willing to sell KCS's Baton Rouge to New Orleans to ease regulatory concerns about competition.I wonder who will be the CN-approved operator for this line. I'm going to take a guess and say it will be a allied shortline operator like WATCO and G&W. CN will retain trackage rights to serve all the industries. Is this "balanced competition?" Not really.
Shortline614 wrote: ↑Thu May 27, 2021 11:41 amIt's worth bearing in mind that exclusive CN service to Prince Rupert and Halifax long predates the current regulatory bodies in Canada. Prince Rupert was literally brought into existence in 1910 to serve as the Pacific terminus of CN predecessor Grand Trunk Pacific. And while the CP did have lines in Nova Scotia back in the day through their ownership of the Dominion Atlantic Railway they were isolated from the rest of the CP system-- the connection was via steamship from Digby to St. John, NB. It's not as if CN acquired sole control of these ports through mergers that occurred under the purview of Transport Canada.Gilbert B Norman wrote: ↑Thu May 27, 2021 9:24 am Mr. Shortline, somehow when I addressed Loonies, I was thinking how the Canadian regulatory agency, Transport Canada, permits CN to "own" both Halifax and Prince Rupert. Somehow, the paucity of "berths" confronting shipping at present means the maritime companies have little choice other than to call at either.That makes more sense. I guess the same "loonies" that allow CN exclusive access to Prince Rupert and Halifax might have a similar line of thinking to those who allow CSX exclsive access to places such as Tampa. CP and NS both have this problem where they serve less ports than their competitors. Just compare how many gulf ports CSX serves vs NS.
Shortline614 wrote: ↑Thu May 27, 2021 11:41 am I don't think "Lakes to Gulf" is what it's all about for CN. With the execption of the Kansas City-Detroit "Speedway," all talk from CN i've seen has concerned Mexico. As for CP, I would say it's both a Mexico and a Gulf play. It's a Mexico play because of the massive amount of Mexico-Midwest traffic that is currently going over the road instead of rail, and it's a Gulf play becase CP doesn't have lines south of Kansas City.It would be great if Mexico could be an equal member of NAFTA (or whatever Trump chose to "rechristen" it). Just think, a deepwater Port with plenty of berthings, stevidorage costing half of what the ILWU thinks is the "going rate", and a "captive" line haul essentially free of highway competition. Lazaro Cardenas sure seems like "the hot setup".
“I am all for promoting much more competition in the freight world, particularly among railroads and particularly with railroads getting more freight off the highways and onto the rails,” Oberman says. “But consolidating railroads even more than they have been, I don’t see the argument about why that would help them get more freight off the highways.”Very interesting because one of the major benefits touted by both CP and CN in their quest for KCS is how a combined railroad could take more trucks off the road. The remark for more competition is also very intersting. I wonder if the STB could force a railroad like CSX to give NS access to Nashville and Florida. The implcations of what Chariman Oberman don't bode well for either CPKC or CN-KCS.
What’s needed, Oberman says, is more rail competition, not less.
“The thing that’s impressed me most since I’ve come to the board is the lack of competition for most shippers in most parts of the country,” Oberman says. Many shippers are captive simply because they are located on a single rail line with no opportunity for service from a distant second railroad, he explains.
Gilbert B Norman wrote: ↑Thu May 27, 2021 9:24 amMr. Shortline, somehow when I addressed Loonies, I was thinking how the Canadian regulatory agency, Transport Canada, permits CN to "own" both Halifax and Prince Rupert.Ahhh ... I thought you were referring to the Canadian coinage for a dollar. "Loonies talk" as in Canadian Dollars talk (CN making a huge cash offer for KCS compared to CP's cash offer).
Shortline614 wrote: ↑Thu May 27, 2021 2:06 pmAnd yet Chairman Oberman voted to approve the CP Voting Trust.
Very interesting because one of the major benefits touted by both CP and CN in their quest for KCS is how a combined railroad could take more trucks off the road. The remark for more competition is also very intersting. I wonder if the STB could force a railroad like CSX to give NS access to Nashville and Florida. The implcations of what Chariman Oberman don't bode well for either CPKC or CN-KCS.
