For ‘CPKC’ Proposal, Widespread Support (Updated)

Written by Marybeth Luczak, Executive Editor
Among the nearly 260 supporters of the planned CP-KSC merger are Hapag-Lloyd and Genesee & Wyoming.

Among the nearly 260 supporters of the planned CP-KSC merger are Hapag-Lloyd and Genesee & Wyoming.

Canadian Pacific (CP) and Kansas City Southern (KCS) have announced that more than 405 customers and stakeholders are backing their planned combination, “CPKC.”

The Class I railroads reported April 20 that Bartlett Grain, Port of Milwaukee, and Asociación Mexicana de la Industria Automotriz A.C. (AMIA) are part of a growing list of supporters—shippers, ports, transloads and others—who have filed letters and statements with the Surface Transportation Board (STB).

CP and KCS first reported supporter filings late on March 31. Notable is Genesee & Wyoming, the largest Class II and III railroad holding company. Among the nearly 260 others announced at the same time: Maersk, Hyundai Glovis, Kraft, Nestlé, Hapag-Lloyd, North Dakota Grain Dealers Association, Evergreen, Boise Cascade Wood Products Building Materials, Ragasa Industrias S.A., and Ag Processing. Another 45 supporters were announced April 6, including: SSAB, Domtar, Farmers Cooperative of Hanska, Port of New Orleans, and E.J.R. Reload. And another 75 were reported April 12; they include XPO Logistics, CF Industries, Dollarama, Millar Western and Full Circle Ag.

STB must approve the combination, which was announced March 21 and is also subject to CP and KCS shareholder approvals and other customary closing conditions. The STB review is expected to be complete by mid-2022, CP and KCS said.

“Many of these supporters requested the STB to review the transaction as swiftly as possible,” the merger partners said. “They expect the combination would, among other benefits, invigorate transportation competition, expand access to existing and growing markets, and provide new service offerings that would improve transit times and reliability.”

From the West, CP connects directly with KCS. From the East, CP must operate over Norfolk Southern through central Michigan via limited trackage rights into Chicago, then over CP short line subsidiary DM&E-South.

CP and KCS together, joining in Kansas City, Mo., would connect customers via single-network transportation offerings between points on CP’s system throughout Canada, the U.S. Midwest, and the U.S. Northeast, and points on KCS’ system throughout Mexico and the South Central U.S. The merger partners noted that their combination is “expected to provide an enhanced competitive alternative to existing rail service providers and is expected to result in improved service to customers of all sizes. Grain, automotive, auto-parts, energy, intermodal and other shippers would benefit from the increased efficiency and simplicity of the combined network, which is expected to spur greater rail-to-rail competition and support customers in growing their rail volumes. The single integrated rail system would also connect premier ports on the U.S. Gulf, Atlantic and Pacific coasts with key overseas markets.”

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