BNSF is asking the Surface Transportation Board (STB) to impose conditions that preserve competition, particularly at the U.S.-Mexico border, if the proposed Canadian Pacific-Kansas City Southern merger is approved.
VIDEO INTERVIEW: 2022 RAILROADERS OF THE YEAR – CANADIAN PACIFIC’S KEITH CREEL AND KANSAS CITY SOUTHERN’S PAT OTTENSMEYER
Railway Age’s 2022 Railroader of the Year Award, our 59th annual, goes to two exemplary and visionary North American rail industry leaders: Canadian Pacific President and Chief Executive Officer Keith Creel, and Kansas City Southern President and Chief Executive Officer Patrick J. Ottensmeyer. The two are reconfiguring the North American rail landscape by completing, if all goes as planned, what will be the first Class I merger in more than 20 years, and creating North America’s first transnational freight railroad, Canadian Pacific Kansas City, or CPKC.
In a July 19 press release, the Government of Mexico, through the Ministries of Energy, Finance and the Tax Administration Service (SAT), made public a list of active and suspended taxpayers on its Importers’ Registry, indicating that the suspensions were made due to several taxpayers apparently not being in full compliance with requirements under its Foreign Trade Rules. Among them were Kansas City Southern de México (KCSM) and Grupo Mexico’s Ferrosur rail freight subsidiary.
CN on April 21 submitted to the U.S. Surface Transportation Board a prefiling notification of its intent to file an application seeking authority to combine with Kansas City Southern “further to CN’s superior proposal for a cash-and-stock transaction valued at $33.7 billion, or $325 per share.”
Two first-quarter 2021 surveys of rail shippers on pricing and business outlook as well as equipment needs conducted by Cowen and Company analysts Jason Seidl (Managing Director and Railway Age Wall Street Contributing Editor), Matt Elkott and Elliot Alper indicate that, compared with the previous quarter, Class I railroad customers are anticipating somewhat higher rate increases, and a slight decline in new railcar demand.
Rail shippers in fourth-quarter 2020 expected price increases of 3.2% (up 10bps sequentially), and their sub-group of railcar buyers raised order expectations modestly, according to two surveys conducted by Cowen and Company analysts Jason H. Seidl (Managing Director and Railway Age Wall Street Contributing Editor), Matt Elkott and Elliot Alper.
Kansas City Southern (KCS) has promoted Rodrigo Flores from Vice President Automotive to Vice President Automotive and Intermodal Sales, effective Sept. 1, 2020. In this expanded role, Flores will be responsible for the automotive and intermodal business units in the U.S. and Mexico.
The Rail Transportation Regulatory Agency of Mexico (ARTF), described as “a decentralized body of the Secretariat of Communications and Transportation,” established, nearly 25 years after the country’s national railroad was privatized, rate regulations for its three railroad concessions—Ferrocarril Mexicano, SA de CV (Ferromex), Ferrosur, SA de CV, and Kansas City Southern de México, SA de CV (KSCM).
“We view concerns around Kansas City Southern’s concession in Mexico as overblown. The exclusivity provision cannot be revisited until 2027 and the concession remains in effect for 20 years after that. Further, KSU is improving its operations via PSR, which should aid Mexico as reliable rail service is likely to be a necessity for the country as it grows its manufacturing base. Reiterate Outperform.”
“Shippers expect rail price increases of 2.3%, up 40bps sequentially, above rail cost inflation, but well below the survey’s average. Economic expectations are all higher sequentially; some remain below the survey’s average while some are very positive indicators. With PSR cost-cutting, growth opportunities and the ability to capitalize on supply chain near-shoring, Kansas City Southern remains our top rail pick.”