Canadian Pacific - Kansas City Southern merger

[newbryford]

Canadian Pacific Kansas City

 

https://www.railwayage.com/freight/class-i/canadian-pacific-kansas-city-southern-will-merge-into-the-first-usmca-railroad-cpkc/?fbclid=IwAR00cueGRKCqF2wTNQ9ADLtLfXScSkVobZky6IPo6MmuAlDfRGDnR-wWYME

[APOLLO]

I bet they sat up all night thinking of the new company name !!!!

 

I hope they keep the KCS livery on the locos, looks quite smart.

 

 

So it's down to seven class one railroads in the whole of the USA

 

Amtrak, BNSF, CN, CPKC, CSX, NS & Uncle Pete (UP)

 

Look at this former class one list - https://en.wikipedia.org/wiki/List_of_Class_I_railroads

 

The modern scene over there is getting a bit boring.

 

Brit15

[pH]

Let’s not get too carried away yet. Remember the CN-BNSF merger!

 

https://www.stb.gov/Decisions/readingroom.nsf/WEBUNID/9E0BA130B4D48DB1852568B0005B5AE4?OpenDocument

 

The US does not like foreign control of US companies.

Edited March 21, 2021 by pH

[F-UnitMad]

Or the proposed Southern Pacific Santa Fe intended merger, with the famous "Kodachrome" livery, with the initials that were mockingly reported as "Shouldn't Paint So Fast".

 

Interesting that the Mid-West part of CP Rail is mostly Ex-Soo Line, and years ago the Soo itself engaged in merger & acquisition to reach Kansas City. This does seem like the next logical step, but just as when the Soo took over the Milwaukee when CNW (& GTW I think) had put in higher bids, the STB (Surface Transportation Board) can act in mysterious ways at times, so this planned merger may yet fall through.

 

As for the modern US scene getting more boring - that's where an interest in Short Lines helps!!

[APOLLO]

Yes lots of interesting "spin off" short lines have been created as the big boys sell bits off. Some short lines are many years old, and many are not "short" either, but all are interesting !!

 

Brit15

[mdvle]

Be interesting to see how this plays out in Canada in terms of PR - both CP (2 flags) and CN (North America logo) attempted to downplay their Canadian identity back in the 90s and quickly abandoned the effort after the backlash.

 

Will the intervening 25 or so years change things?

[dave1905]

The US requires dispatching of roads physically in the the US be located physically in the US, the former KCS portion would remain dispatched in the US.  The two biggest assets of the KCS are access to the Gulf of Mexico and access to Mexico.  That will mean some loss of business for the UP, since the CP gives unit potash trains to them going to Beaumont.  The UP owns more of the N-S lines that directly compete with the KCS than the BNSF (the former MKT, MP, SSW).

[Allegheny1600]

As a former keen KCS fan and friend of a KCS insider, this is not unexpected - if it goes ahead.

As a fan however, I have to say, “ bollox” 

The KCS was pretty innovative, the first to go with “Super power” steam, amongst the first to adopt streamliners, one of the first to take advantage of the NAFTA agreement amongst other things.

It has been a pleasure to observe the last of the regular “class 1” roads still operating, I don’t reckon much to these present day big roads, they’re pretty characterless imho.

Their individualality and resourcefulness made them prey, it was always going to happen.

[dave1905]

Quote

The KCS was pretty innovative, <snip> one of the first to take advantage of the NAFTA agreement amongst other things.

 

How do you figure that?  The KCS didn't go to Mexico until decades after NAFTA was passed, and until the CP bought the SOO never interchanged with a Canadian road.  Of the modern class 1's that reach Mexico, it was the last one to do so.

[mdvle]

14 hours ago, Allegheny1600 said:

Their individualality and resourcefulness made them prey, it was always going to happen.

 

My guess those didn't factor into the decision at all.

 

(Relatively) small size - hence cheaper - made them a target, combined with their track network and existing customer base.

 

Essentially a play by CP to become bigger (Wall Street / Bay Street seem to like bigger) and perhaps diversify - just like CP's previous attempt at NS, and CN's attempt at BNSF.

[Wendell1976]

23 hours ago, F-UnitMad said:

when the Soo took over the Milwaukee when CNW (& GTW I think) had put in higher bids, the STB (Surface Transportation Board) can act in mysterious ways

 

The main reason why the Soo Line was allowed to purchase the Milwaukee Road was because the Soo had less overlapping or duplicate lines compared to the Milwaukee. If the Chicago & North Western had bought the Milwaukee Road, railroad competition would have been decreased. The reason why the SPSF merger was denied was because the Southern Pacific Railroad and the Santa Fe Railway had way too many miles of mainline track in the American Southwest(California, Arizona, New Mexico, and Texas) combined.

 

Wendell

Idaho, USA 

[gelboy45]

Will the new (abbreviated) name be CanKan?

;O)))

Gerry

[pH]

1 hour ago, Wendell1976 said:

The main reason why the Soo Line was allowed to purchase the Milwaukee Road was because the Soo had less overlapping or duplicate lines compared to the Milwaukee. If the Chicago & North Western had bought the Milwaukee Road, railroad competition would have been decreased. 

 

According to this: http://www.trainweb.org/milwaukee/article.html Interstate Commerce Commission (ICC) staff actually recommended the Milwaukee/CNW merger be allowed. However, since the financials had changed since the original proposal had been put together, the ICC wanted the merger terms revised. The CNW wouldn’t agree to the changes, so the merger was off.

 

The whole story of the Milwaukee demise and bankruptcy is amazing. 

[Wendell1976]

13 minutes ago, pH said:

 

According to this: http://www.trainweb.org/milwaukee/article.html Interstate Commerce Commission (ICC) staff actually recommended the Milwaukee/CNW merger be allowed. However, since the financials had changed since the original proposal had been put together, the ICC wanted the merger terms revised. The CNW wouldn’t agree to the changes, so the merger was off.

 

The whole story of the Milwaukee demise and bankruptcy is amazing. 

 

I had thought that Trains magazine had mentioned the part about the different railroads' comparison of their lines to the Milwaukee Road's. Thank you for the information.

 

Wendell

Idaho, USA 

[F-UnitMad]

2 hours ago, gelboy45 said:

Will the new (abbreviated) name be CanKan?

;O)))

Gerry

It ought to be, now!!

[pH]

On 21/03/2021 at 17:50, dave1905 said:

 

How do you figure that?  The KCS didn't go to Mexico until decades after NAFTA was passed, and until the CP bought the SOO never interchanged with a Canadian road.  Of the modern class 1's that reach Mexico, it was the last one to do so.

 

- NAFTA went into effect on January 1, 1994.

- In 1995, KCS bought a 49% share of the Texas-Mexican Railroad, which gave them access to the connection to Mexican railways at Laredo.

- At the end of 1996 KCS, in association with a Mexican company, won the right to operate part of the privatised National de Mexico, which connected with the Tex-Mex at Laredo, beating out Union Pacific amongst others.

- In 1997, the Surface Transportation Board granted trackage rights to the Tex-Mex to connect to the KCS at Beaumont, Texas as part of the UP-SP merger conditions.

- KCS sold their Tex-Mex shares in 2002, but again purchased a controlling interest in Tex-Mex, effective January 2005.

- In 2005, KCS bought out their Mexican partner in the privatised NdeM.

- Since then, KCS have relaid an old SP route to give them a more direct route, under their own control, from the Mexican border to Houston, on the way to Beaumont.

 

So KCS had access to Mexico the year after NAFTA went into effect, and KCS now has a subsidiary in Mexico, which no other US Class 1 railroad has.

 

(If you're being really pedantic - and don't take this too seriously - the current KCS was actually the first US railroad to reach Mexico. The Texas-Mexican railroad, now part of KCS, made the first connection of a US railroad with a Mexican railroad at Laredo in 1883.)

[dave1905]

15 hours ago, pH said:

So KCS had access to Mexico the year after NAFTA went into effect, and KCS now has a subsidiary in Mexico, which no other US Class 1 railroad has.

 

 

Note quite.  The KCS had lines in Mexico and owned the Tex Mex but it didn't connect to the US KCS lines.    There was no way to run a train over the KCS to Mexico.  the closest the KCS  got to Mexico was Beaumont, TX.  The ONLY way the KCS could cars get to the TM is to interchange it to the UP, who would haul it to Laredo and give it to the KCSM.  A UP train with "UP" cars on UP track.  KCSM and the TM was an island.  It wasn't until the SP merger that that the KCS could connect the two pieces.

 

Meanwhile the UP, SP and BNSF had been running trains from Canadian connections to Mexico since 1994.

[pH]

45 minutes ago, dave1905 said:

It wasn't until the SP merger that that the KCS could connect the two pieces.

 

Meanwhile the UP, SP and BNSF had been running trains from Canadian connections to Mexico since 1994.

Yes, but KCS got running rights to Beaumont in 1997 which, although it wasn’t immediately on implementation of NAFTA, wasn’t too long afterwards. And they now have their own line Victoria-Rosenberg, which cuts down their dependence on those running rights. 
 

I wonder if there’s been some cooperation/proving of concept going on in advance of this announcement. I’ve seen three KCS ‘Belles’ here on the western end of the CP mainline in the last couple of years. UP engines aren’t unknown, but CP and UP operate power pools in some areas, so that’s not too unexpected. But, as the merger announcement makes clear, the only points of contact between CP and KCS are in the Kansas City area, and that’s a long way away.

[mdvle]

They expect the STB to decide on the merger proposal within 10 months

 

http://railfan.com/cp-kcs-formally-inform-stb-of-intentions-to-merge/

[APOLLO]

Wanna ride on a KCS freight ?- Some superb vids here

 

https://www.youtube.com/channel/UC8XCmWXE2J5dF7wXkzUVHtw/videos

 

Brit15

[Allegheny1600]

On 23/03/2021 at 06:53, pH said:

 

- NAFTA went into effect on January 1, 1994.

- In 1995, KCS bought a 49% share of the Texas-Mexican Railroad, which gave them access to the connection to Mexican railways at Laredo.

- At the end of 1996 KCS, in association with a Mexican company, won the right to operate part of the privatised National de Mexico, which connected with the Tex-Mex at Laredo, beating out Union Pacific amongst others.

- In 1997, the Surface Transportation Board granted trackage rights to the Tex-Mex to connect to the KCS at Beaumont, Texas as part of the UP-SP merger conditions.

- KCS sold their Tex-Mex shares in 2002, but again purchased a controlling interest in Tex-Mex, effective January 2005.

- In 2005, KCS bought out their Mexican partner in the privatised NdeM.

- Since then, KCS have relaid an old SP route to give them a more direct route, under their own control, from the Mexican border to Houston, on the way to Beaumont.

 

So KCS had access to Mexico the year after NAFTA went into effect, and KCS now has a subsidiary in Mexico, which no other US Class 1 railroad has.

 

(If you're being really pedantic - and don't take this too seriously - the current KCS was actually the first US railroad to reach Mexico. The Texas-Mexican railroad, now part of KCS, made the first connection of a US railroad with a Mexican railroad at Laredo in 1883.)

Thanks, Ph!

 I “knew” all that, having followed the KCS for many years but couldn’t remember how to go about describing it all and to be honest, I wasn’t inclined to do the research to back up my previous statement, if someone wants to get picky about certain aspects, so be it!

 I don’t recall any other road making a deal about it, either but the KCS has done;

Nafta Railway by Bob King, on Flickr

Copyright Bob King.

Cheers y’all

[dave1905]

Of the remaining railroad west of the Mississippi, the KCS was the LAST railroad to connect with Mexico.  At the same time the KCS bought TFM, the UP bought part of FerroMex, so the UP also owns railroads in Mexico. 

 

I worked for the UP and spend the majority of my career working on the Southern District or Southern Region that handled the interchange with Mexico for the UP.  I helped manage the flow of interchange to Mexico for over a decade before the KCS entered the picture and I helped manage the movement of the KCS trains between Beaumont and Robstown.  The UP, not the KCS, worked with the Mexican government and railroads to implement Despacho Previo.  The UP, not the KCS, built the X-ray railcar inspection facilities at the border.

 

Regardless of what they paint on the side of the engine, the KCS was the last railroad to the NAFTA party.

[Allegheny1600]

19 hours ago, dave1905 said:

 

I worked for the UP and spend the majority of my career working on the Southern District or Southern Region that handled the interchange with Mexico for the UP.  I helped manage the flow of interchange to Mexico for over a decade before the KCS entered the picture and I helped manage the movement of the KCS trains between Beaumont and Robstown.  The UP, not the KCS, worked with the Mexican government and railroads to implement Despacho Previo.  The UP, not the KCS, built the X-ray railcar inspection facilities at the border.

Fair enough!

You were there in a “boots on the ground” capacity, I certainly wasn’t. I learned what I know from a personal friend and from years of reading “Trains” magazine.

I’m not aware of my friend being a particular embellisher of the truth, “Trains” however, should certainly not be or have been reporting things incorrectly.

 I consider myself educated, thank you.

[pH]

Now it’s getting interesting!
 

https://www.cbc.ca/news/business/cp-cn-ks-railway-1.5994312

[John M Upton]

Or silly, depending on your point of view...