CPKC

Canadian Pacific Kansas City Limited, doing business as CPKC, is a Class I railroad in North America that resulted from the merger of Canadian Pacific Railway (CP) and Kansas City Southern (KCS) on April 14, 2023. It is the first and currently the only single-line railway connecting Canada, Mexico, and the United States, operating approximately of rail across the three countries. CPKC is headquartered in Calgary and led by Keith Creel as President and CEO.

History

Canadian Pacific Railway (CP) announced on March 21, 2021, that it was planning to purchase Kansas City Southern (KCS) for US$29 billion. A competing offer was made by Canadian National Railway (CN) on April 20, 2021, at $33.7 billion. CN's merger attempt was blocked by a ruling by the US Surface Transportation Board (STB) in August 2021 that the company could not use a voting trust to assume control of KCS, due to concerns about potentially reduced competition in the railroad industry.

On September 12, 2021, KCS accepted a new $31 billion offer from CP. Though CP's offer was lower than the offer made by CN, the STB permitted CP to use a voting trust to take control of KCS. The voting trust allowed CP to become the beneficial owner of KCS in December 2021, but the two railroads operated independently until receiving approval for a merger of operations from the STB.

Union Pacific and BNSF Railway filed objections to the merger during hearings before the STB, where the two companies were concerned about CPKC's projected increase in traffic over the next few years and the impact of that increase on UP owned tracks that run through the Houston area (Houston, West Belt, East Belt, Beaumont, Harrisburg and Glidden Subdivisions), where both UP and BNSF operate a large amount of daily traffic. CPKC has trackage rights from Beaumont to Rosenberg. CP and KCS defended their proposed merger during the hearings, arguing that Houston has sufficient capacity to support the projected increase in traffic. Along those lines, CP President and CEO and future CEO of the merged company, Keith Creel, argued during the hearings that at the west end of Englewood Yard, receiving and departure tracks can be lengthened to accommodate longer trains. UP disputed in part the arguments presented by CP, saying that although they have a Yard expansion project, it could not proceed until the previous environmental problems were solved, due to the fact that the area around Englewood is contaminated with creosote. Southern Pacific operated a facility for decades in Englewood for the treatment of rail ties using chemical creosote. The STB suggested, to mediate between the disputing parties, the possibility that, pending approval of the merger, KCS apply to UP for trackage rights from Texarkana to Laredo, via San Antonio and Austin to rerouted part of his traffic north-south through there, Houston bypassing.

Metra also opposed the merger, along with a group of West suburban Chicago communities ( DuPage County, Bartlett, Bensenville, Elgin, Itasca, Hanover Park, Roselle, Wood Dale and Schaumburg) on the Milwaukee West Line, arguing that the projected increase in traffic would bring delays in the provision of Metra's passenger rail service, as well as a decrease in the quality of life and the negative consequences on economic development in the communities located along the line.

Despite all the objections raised at the hearings, the final approval of the merger came on March 15, 2023, and the merger was completed on April 14, 2023.

The merger created the first and only single-line railway connecting Canada, the U.S. and Mexico with an approximately network. Fully integrating the two railroads is expected to take up to three years.

The company announced on April 21, 2023, that it had landed its first major contract, handling Schneider National intermodal traffic between the U.S. and Mexico. On April 25, it signed a similar agreement with Knight-Swift. The announcement was seen as backing up pre-merger projections that CPKC's single-line service would enable it to compete in the Chicago–Mexico corridor that had been dominated by the Union Pacific and BNSF. In response, on April 24, Union Pacific responded by announcing a partnership with Canadian National Railway and Grupo México (owner of Ferromex and Ferrosur) to work together to accelerate the exchange of intermodal traffic between Mexico and Chicago or further north into Canada.

On May 14, 2023, CPKC launched its new service "Mexico Midwest Express (MMX)", numbered I180 and I181, which is mainly oriented to intermodal and automobile transportation, and also provides an approximate travel time of 98 hours between Chicago and Kansas City to Monterrey and San Luis Potosi, shorter travel times than those offered by the "Falcon Premium" service of UP, CN and Grupo México. Previously, and as part of preparatory moves for the day after the merger, CP and KCS launched a series of test interline services between the Lázaro Cárdenas Port in the Michoacán Mexican state, and the Bensenville Yard in Chicago.

On June 28, 2023, CPKC announced the intent to jointly acquire with CSX Transportation the Meridian and Bigbee Railroad (MNBR). The MNBR creates a connection between CSX in Montgomery, Alabama and Meridian, Mississippi, where it joins the Meridian Speedway westbound. Under the proposed agreement, CPKC would take over the section of the line between Meridian and Myrtlewood, Alabama, while CSX would do the same between Myrtlewood and Montgomery. If approved by the STB, this would provide a direct connection between the two companies. In compensation, MNBR owner Genesee & Wyoming would receive CPKC properties in Alberta along with rights on CPKC lines. MNBR would also be able to continue serving existing customers on the line. The connection through the MNBR line will allow CSX traffic destined for Mexico to be delivered directly to CPKC, eliminating the need for an third intermediary railroad to move such traffic. Currently, CSX traffic bound for Mexico is exchanged with the Union Pacific in New Orleans, who then takes it to the cross-border gateway in Laredo, Texas, where it is delivered to CPKC.

In October 2023, CPKC and the Kansas City Current of the National Women's Soccer League announced a naming rights deal for the Current's new stadium in Kansas City, Missouri, valid for ten years. The stadium is the first stadium in the world built specifically for women's professional sports.

Operations

CPKC operates approximately of rail across Canada, Mexico and the United States. As of April 2023, CPKC has around 20,000 employees. CPKC has its global headquarters in Calgary with its U.S headquarters in Kansas City, Missouri, and its Mexico headquarters in Mexico City and Monterrey.

Company executives said that merging CP and KCS would be "straightforward" because the railroads only touch at Kansas City, and interchange volumes were relatively low, with about four trains per day as of September 2021. They also cited that the two companies largely used the same back-office information technology systems.

The railroad maintains its own police force, the Canadian Pacific Kansas City Police.

References

External links

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{{North America Class I

Railway companies of Mexico
Railway companies of the United States
Railway companies of Canada
Companies based in Calgary
History of transport in Canada
Class I railroads in North America
Companies listed on the New York Stock Exchange
Companies listed on the Toronto Stock Exchange
Railway companies established in 2023
Dual-listed companies
2023 establishments in Canada