The united business of Canadian Pacific (CP) and Kansas City Southern (KS) started operating as Canadian Pacific Kansas City (CPKC) on April 15th, 2023. When CP announced its interest in combining with KCS in March 2021, the merger process got under way just over two years ago. Together, the networks are taking steps toward connecting both Canadian coasts, the Midwest region of the United States, and many locations in Mexico, notably the Port of Lázaro Cárdenas on Mexico’s Pacific coast. The head office of CPKC will be located Calgary, Alberta, and the goal is to provide shippers with single-line service. The network will have about 20,000 miles of rail, and it will take more than three years to develop.
News Release by CPKC
In a news release, CPKC President and CEO Keith Creel claimed that the new CPKC network is going to provide customers with new rail options in more markets and to reduce the number of trucks on the road. Additionally, the new project aims to increase rail safety by incorporating important industry-leading safety practices.
Furthermore, CPKC is spending more than $275 million to boost train capacity and safety on the crucial north-south CPKC main line between the Upper Midwest of the United States and Louisiana. Each year, the railway estimates that around 64,000 long-haul truck commodities will be converted to CPKC’s intermodal services. CP has been testing trains that transport temperature-controlled commodities from Midwest markets to Laredo, Texas, as well as lanes that transport service-sensitive goods to markets in the Upper Midwest and into Canada on an interline basis.
Creel’s goal is to create additional value for everyone involved in the project by creating new jobs, expanding the economy, reducing carbon emissions through creating a sustainable rail network.
The merge between the two is costing upwards of $31 billion and was authorized by the businesses’ shareholders in December of 2021 The board received thousands of comments from the plan’s public hearings. When STB produced an environmental impact statement for the merger, opinions on it were also received. The merger was approved by STB last month. As a result, after the merger was complete, there would be six instead of seven Class I railroads.
The merger effort by CP wasn’t without challenges. In April 2021, CP’s competitor CN also tried to merge with KCS, but that effort was abandoned when it was determined that the regulatory obstacles were too great. While linking to their new website for CPKC, both CP and KCS’ websites are still accessible.
A New Frontier for Intermodal
An important turning point in the history of North American railroads was reached with the founding of CPKC, which led to the creation of a distinctive single-line rail network that spans the Midwest of the United States, crosses both Canadian coasts, and extends to a number of locations in Mexico. Additionally, the merger provides shippers with single-line service, enhances rail capacity and safety, and redirects truck cargo to intermodal services. Since the merger was approved by the Surface Transportation Board last month, CPKC is ready to move today’s business and will engage in vigorous competition to grow in the future.