NORTH AMERICA: Canadian Pacific Kansas City has said that it does not believe that more consolidation is necessary for the Northern American rail industry, and it ‘strongly feels’ that any major merger would pose ‘unique and unprecedented risks to customers, rail employees and the broader supply chain’, which ‘would be exacerbated by the inevitable follow-on consolidation’.
KPKC’s statement on August 26 came after activist investor Arcona made a public its call for CSX to seek a merger with KPKC or BNSF, and follows Union Pacific’s announcement of its plan to merge with Norfolk Southern. CPKC said it is not interested in participating in immediate rail industry consolidation, ‘despite the suggestions by some that it take part’.
CPKC President & CEO Keith Creel said ‘we believe that a transcontinental merger would trigger permanent restructuring of the industry and result in a disproportionately large railway whose size and scope would require others to take action. This will likely result in an unnecessary wave of railway mergers that today is not the best way to support American businesses nor the public interest, and has the potential to create more issues than it solves.’
KPKC said the existing six major railways in the USA are capable of offering their customers high quality and near-seamless transport services across the continent, and there are opportunities for further co-operation between ‘willing’ railways to improve services while preserving options for shippers.
It said many of the benefits asserted in support of transcontinental mergers could be achieved through new and expanded partnerships, customer service innovations and additional co-operation among railways, such its collaboration with CSX on the Southeast Mexico Express service.
