Major U.S. Freight Rail Merger Approved After Two-Year Review - Modern Distribution Management

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Major U.S. Freight Rail Merger Approved After Two-Year Review

Canadian Pacific’s $31 billion acquisition of Kansas City Southern represents the first major railroad merger in over 20 years.
Bartlett, Illinois, USA. A pair of locomotives led by a specially painted Canadian Pacific Railway heritage unit power a freight train through northeastern lllinois destined for Davenport. Iowa. The train had recently departed from the CP freight yard in Bensenville, Illinois, just outside Chicago.

Federal regulators approved Canadian Pacific’s $31 billion acquisition of Kansas City Southern on March 15, representing the first major railroad merger in over 20 years.

The merger — which will link the U.S., Canada and Mexico — will combine the two smallest of the nation’s seven major railroads following a two-year review by the U.S. Surface Transportation Board.

The Transportation Board said in a statement that the new railroad “will facilitate the flow of grain from the Midwest to the Gulf Coast and Mexico, the movement of intermodal goods between Dallas and Chicago and the trade in automotive parts, finished vehicles, and other containerized mixed goods between the United States and Mexico.” The new single-line service will shift “approximately 64,000 truckloads annually from North America’s roads to rail,” the boards said.

The combined company will have little to no track redundancies or overlapping routes, according to the board. The merger is also expected to add at least 800 new union jobs in the U.S.

Freight rail has frequently been in national news headlines since early February when a train derailment in Ohio caused a large fire and forced evacuations.

“The Board is well cognizant of the recent elevated level of public concern stemming from the derailment in East Palestine, Ohio, and as always, the Board has carefully analyzed the proposed merger from a safety perspective,” the board said.

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