By Justin Franz
CHICAGO — A flurry of comments filed with the U.S. Surface Transportation Board in recent days shows that not everyone is on board with the proposed Canadian Pacific-Kansas City Southern merger, which would be the largest Class I railroad combination in a generation.
The resistance is not unexpected — other Class I carriers were surely not going to let two competitors merge without comment — but it could complicate CPKC’s plans for a smooth federal review, which is expected to take much of the year. The comments could also shape exactly what the merger looks like and the STB could force CPKC to divest from some routes — like CN would like it to do between Springfield, Ill., and Kansas City — and give trackage rights to other lines.
No one is fighting the CPKC merger more than CN, which had tried to swoop in last year and steal KCS from under CP. In comments filed last week, CN officials wrote that the CP and KCS’ merger application was “riddled with errors” and that the combined system would in fact harm the public and rail customers. It stated that revenue projections were exaggerated and that the proposed financial plans understated real operation costs by $2 billion. CN has said some competitive issues would be resolved, however, if the STB forced CPKC to sell a line between Springfield, Ill., and Kansas City. CN said the line parallels another CP line between Chicago and Kansas City, but CP disagrees, noting that it doesn’t presently serve Springfield.
Further south, along the U.S.-Mexico border, Union Pacific has raised concerns about competition for traffic in and out of Mexico via the Laredo Gateway. UP said that CPKC would try and divert traffic onto its own routes, negatively impacting competing railroads and shippers. UP wants the STB to force CPKC to offer shippers “commerically reasonable” rates to various interchange gateways and that it would not reduce service through the Laredo Gateway (which could negativly impact roads like UP). BNSF has also raised concerns about the Laredo Gateway and has requested trackage rights between Robstown to Laredo, Tex., in an apparent effort to eventually gain access to the Mexican rail system. KCS currently has the contract to operate in Mexico for the next few years, but that will be up for grabs in 2027.
Further east, Norfolk Southern and CSX are raising concerns about operations on the Meridian Speedway, a joint NS-KCS venture between Meridian, Miss., and Shreveport, La. NS is worried CPKC will try and increase its use of the line, thus negatively impacting its own intermodal operations. CSX echoed the concerns about the Meridian Speedway while also asking the STB to preserve reasonable rates for rail traffic going in and out of Mexico.
Finally, a coalition of communities in Chicago, are asking that the STB force CPKC to spend nearly $9 billion in upgrades to Metra’s Elgin Subdivision (part of the Milwaukee District West Line), which CP operates freight over. The communities, including Elgin, Bartlett, Hanover Park, Bensonvile and others, have banded together and called themselves the “Coalition to Stop CPKC.” In the filing, the communities state that CPKC would increase its use of the Elgin Subdivision by 300 percent, which could negatively impact commuter operations. The coalition specifically would like upgraded train stations to be built, additional grade separated crossings, upgrades to more than 20 existing crossings and “dozens of others measures required to mitigate the substantial increase in vibration, noise, damages to underground utilities and water pipes, and risks of accidents and delays caused by train movements and stoppages due to operational failures and other factors.”
