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Even though KCS is the smallest of the Class 1’s; I would not at all consider this proposal to be a “slam dunk”.

NS’ participation in the Meridian Speedway line will have to be addressed as will probable objections from CN or the other railroads.

Since KCSM really involves more of a long term lease of the railroad in Mexico; you can bet their regulators will have something to say about this as well.

Curt

UP, CSX, CN, and NS are particular women of the chorus who have not had their turn to sing.

And is there not a "Surf Board" in Mexico?

My guess:

Kansas City to Laredo to CP

Laredo south:  Some sort of open access?

And how would NS, CN, and CSX get to Laredo if thete is open access?  Open access and/or trackage rights on KCS, UP, BNSF?

And will the rule about what other railroads might do to counter this merger apply?

To the extent that Transport Canada has a say in vetting this merger, they will need to address reduced competition at 2-1 points in Canada. And for shippers currently located on KCS and shipping to points in Canada, the STB needs to assure current gateways and routing options remain open and affordable as well.

About 70% of rail served points in Canada are open to interswitching. Essentially, this means that while you are physically switched by one railroad,  you can still contract with the other to handle your outbound or inbound shipments. If a Canadian customer on CP is currently using CN to handle shipments to KCS points in the US, the CN option will evaporate with this merger. Likewise, a KCS shipper in the US shipping to points in Canada that can utilize either CP or CN will lose the CN option. I don’t have the statistics concerning how much traffic would be impacted in this manner but, I made extensive use of the interswitching option with chemical traffic prior to my retirement in mid 2019.

If the interswitching option as it relates to traffic to and from KCS points is not retained and affordable, this merger will have negative impacts on competition despite it being end to end in nature.

In coming months you will likely read many stories emanating from Calgary and Kansas City about how great this merger will be for shippers. Don’t believe any of it. Mergers generally serve only to reduce competition and drive up costs to customers - especially manifest customers with few options other than rail. Any potential advantages are fleeting and, from a customers perspective, largely unrealized. And I state this from the perspective of one who worked as a rail shipper for over 40 years and experienced the multitude of mergers that took place during that time.

Curt

Sorry to hear this. It's always a shame when another historic railroad is swallowed up and disappears forever. Business is business, but it certainly makes things less interesting. It was nice to see KCS remain independent, and apparently doing well. I hope customers weigh in and oppose it. As Curt says, they are often hurt by these mergers.

Last edited by breezinup
@RamblerDon posted:

The merger makes sense I just hate to see another fallen flag. I am shocked no one has attempted a merger with KCS earlier all things considered.

On a side not I am glad I bought KCS stock years ago. Doing very well now.

I don't think the prior management team would have gone for it.  There's been some changes in the C-suite within the last 4 to 7 years.  They're obviously more willing to consider this type of merger.  Not that the previous team was bad; to everything there is a season.

Steve

It will be interesting to see how much actually changes. Currently the CP's lines in the US are all under the Soo Line with main office here in Mpls-St.Paul. I know people think of Soo Line as a "fallen flag" but it still exists as a corporate entity, since a company in a foreign country cannot directly own a US railroad. FWIW there are still engines and cabooses around here in Soo Line paint even after all these years. From what I've read about CP-KCS, I think what will happen is CP's US rail lines will all placed under the KCS umbrella, with HQ moving to Kansas City. From a railfanning point of view, there might not be much change for some time.

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