Gilbert B Norman wrote:The CP with their iron clad trackage rights over the NYC Water Level route - and access to the motor vehicle facilities along the Detroit-Toledo route, is in a better position to access auto industry traffic than CN could ever expect to be.
GBN, you have said on several occasions that the CN-KCS "Kansas City Speedway" would not be competitive with NS's Wabash, and now you come out and say that CPKC would be in a better position to compete? I am at a loss. Detroit-Chicago has always been a problem for CP, stemming from the fact they have to use Norfolk Southern's line. Using trackage rights over your biggest competitor has never been a recipe for success. D&H anyone? Those trains will be screwed over by the dispatcher even worse then Amtrak, which is really saying something. Not to mention that the ex-MILW Chicago-Kansas City line isn't exactly competitive with anything already.
I began to think of a way for CPKC to get out of this predicament. At first I thought CPKC could upgrade the former Gateway Western then secure haulage rights over the ex-Wabash between Springfield and Detroit, but that has the same problem as the current Water Level Route rights - using the railroad of your biggest competitor to compete with them. A straight no go. Things seem to be a little hopeless.
I can see a way out though. Revive an old SP plan to upgrade the ex-MILW Chicago-Kansas City line to Class III (40 mph). The IHB, which CPKC will have a 49% stake in, would be used to navigate Chicago. CPKC and CSX could then form a Meridian Speedway-style joint venture consisting of the ex-Pere Marquette between the IHB connection in Gibson, Indiana, and Fullerton Wye in Detroit. CPKC could then use trackage rights between Fullerton Wye and the Detroit River Tunnel. No need to secure haulage new rights. No need to spend upwards of 300 million to upgrade a line to nowhere. CPKC still would not match NS's Wabash, but it would give them a fighting chance.
All told, I think that if CN is to prevail - even if their piggy bank is fatter than CP's - they will need to find another means to show the STB their combination will enhance competition. I'm at a loss to think of one.
The only way I think CN could get approval to buy KCS is if they gave the Kansas City-Shreveport-New Orleans line, Shreveport-Jackson-Mobile trackage rights to CP. That way CP gets some of what it wants (access to the Gulf of Mexico), while CN gets some of what it wants (access to Mexico).
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