Amtrak Calls CN’s Plan to Sell KCS Line in Louisiana ‘Extraordinarily Harmful’

On Monday, the last day to file a comment about CN’s plan to put KCS into a voting trust, Amtrak came out swinging against the merger.

Amtrak Calls CN’s Plan to Sell KCS Line in Louisiana ‘Extraordinarily Harmful’

By Justin Franz

WASHINGTON — For the second time in a month, Amtrak is throwing shade at Class Is and their dreams of consolidation and expansion. 

On Monday, the last day the public had to file comments on Canadian National’s plan to put Kansas City Southern into a voting trust while the U.S. Surface Transportation Board reviewed the proposed merger, Amtrak called part of its plan “extraordinarily harmful.” The news came about three weeks after Amtrak came out swinging against another Class I’s plans of expansion: On June 4, Amtrak called CSX Transportation’s planned acquisition of New England’s Pan Am Railways “a significant threat to the American traveling public.”

CN has said that any anti-competitive concerns about its proposed acquisition of KCS will be eliminated by the sale of a 70-mile route between New Orleans and Baton Rouge, Louisiana. CN has said it would hope to maintain trackage rights on the route after it sells it, but Amtrak said that was the “equivalent of a homeowner selling their house but reserving the right to continue to live in it.” 

Although Amtrak does not presently operate between New Orleans and Baton Rouge, passenger rail advocates have seen it as an opportunity for expansion. 

“There is nothing ‘clean’ about replacing a single freight rail operator on the KCS Baton Rouge Line with two railroads, each with the right to operate their own local trains,” Amtrak officials wrote in their comment to the STB. “The resulting duplication of train services and switching operations would make all rail services less reliable, and unnecessarily consume track capacity that could otherwise be utilized for the restoration of passenger rail service.”

News that Amtrak was coming out against the CN’s use of a voting trust — a move that would allow it to acquire KCS before the merger was approved and place the smaller railroad into trust — was quickly promoted on Monday night by Canadian Pacific, which was spurned by KCS earlier this spring. 

On Monday, CP filed its own comments with the STB about the voting trust plan. Among the issues CP raised were that a combined CN-KCS would reduce transportation options for hundreds of shippers and that approving the trust would put “immediate pressure” on other Class Is to merge.

“Hundreds of shippers, governments and other stakeholders across North America have written to the Surface Transportation Board to warn about the potential public interest harms that would come from allowing CN to close into a trust,” said Keith Creel, CP President and Chief Executive Officer. “Only by rejecting the CN voting trust can the board preserve its ability to fully review the public consequences of CN’s proposed acquisition of KCS, without the risk of any anti-competitive harms that a voting trust would set in motion.”

But that’s not to say shippers are overwhelming against the combined CN-KCS. This week, the two railroads filed notice that they had gathered more than 1,600 letters of support for the merger, including more than 900 that specifically supported the use of a voting trust.

This article was posted on: June 29, 2021