Canadian Pacific Kansas City
Map showing two former Class I railroads combined, CP and KCS, which is now CPKC
CPKC system map, showing CP tracks in red and KCS in black. Does not include trackage rights.
Overview
Parent companyCanadian Pacific Kansas City Limited
LocaleCanada, Mexico and United States
Dates of operationApril 14, 2023 (2023-04-14)–present
Predecessor
Technical
Track gauge1,435 mm (4 ft 8+1⁄2 in) standard gauge
Length32,000 km (20,000 mi)
Other
Websitecpkcr.com
Canadian Pacific Kansas City Limited
CPKC
TypePublic
IndustryRail transport
Predecessors
FoundedApril 14, 2023 (2023-04-14)
Headquarters
Calgary, Alberta
,
Canada
Areas served
  • Canada
  • United States
  • Mexico
Key people
Number of employees
20,000

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 32,000 kilometres (20,000 mi) 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.[1] 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.[2]

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.[2] 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.[3][4]

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.[5] 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.[6]

The two companies demanded that CPKC perform construction work on new sidings on both the lines that meet in the Houston area and on Brownsville Subdivision between Placedo and Robstown, near Corpus Christi, where CPKC trains leave the UP tracks in South Texas.[7]

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.[8][9]

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.[10][11][12]

Two CPKC unit trains, one grain and another crude oil, meet up at Siloam Springs, Arkansas - with locomotives from both preceding railroads.

The merger created the first and only single-line railway connecting Canada, the U.S. and Mexico with an approximately 32,000-kilometre (20,000 mi) network.[13] Fully integrating the two railroads is expected to take up to three years.[13]

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.[14] 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.[15] 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.[16]

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.[17] 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.[18]

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 168 miles (270 km) between CSX in Montgomery, Alabama and Meridian, Mississippi, where it joins the Meridian Speedway westbound. Under the proposed agreement, CPKC would acquire the 50.4 miles (81.1 km) segment of the line between Meridian and Myrtlewood, Alabama, so-called Western Line, while CSX will resume operations on the so-called Eastern Line, between Myrtlewood and Montgomery, terminating the lease currently in place with MNBR. MNBR will cease operations between Myrtlewood and Montgomery, although it may continue to operate between Myrtlewood and Meridian and serve existing customers on that segment of the line.[19] 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.[20] The connection through the MNBR line will allow CSX traffic destined for Mexico to be delivered directly to CPKC, eliminating the need for a 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.[21]

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.[22][23]

Operations

CPKC operates approximately 32,000 kilometres (20,000 mi) of rail across Canada, Mexico and the United States.[13] As of April 2023, CPKC has around 20,000 employees.[13] 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.[24]

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.[25]

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

References

  1. ↑ "CN steps up with $33B offer for Kansas City Southern, besting CP's $25B bid". CBC News. April 20, 2021.
  2. 1 2 "Kansas City Southern picks Canadian Pacific's $31 billion bid for railroad". CNBC. September 12, 2021. Retrieved September 13, 2021.
  3. ↑ Kaberline, Brian (March 16, 2021). "Regulator orders pause in consideration of Canadian Pacific-KC Southern merger". Kansas City Business Journal. Retrieved July 4, 2022.
  4. ↑ The great train takeover. Financial Tribune (Video). May 2, 2022. Retrieved July 4, 2022.
  5. ↑ Stephens, Bill (October 25, 2022). "CP and KCS defend merger, rebut claims of critics including other Class I lines and Metra". Trains. Retrieved September 7, 2023.
  6. ↑ Stephens, Bill (October 25, 2022). "Union Pacific: Video of KCS train misled federal regulators about Houston terminal". Trains. Retrieved August 8, 2023.
  7. ↑ Stephens, Bill (July 14, 2022). "BNSF claims CP-KCS merger will throw Houston terminal into gridlock". Trains. Retrieved December 28, 2023.
  8. ↑ https://www.stopcpkc.com/
  9. ↑ https://www.trains.com/trn/news-reviews/news-wire/metra-opposes-cp-kcs-merger-in-regulatory-filing/
  10. ↑ Reynolds, Christopher (April 14, 2023). "CP Rail, Kansas City Southern merger clears path for more cargo, but hitches remain". CBC News. Retrieved April 18, 2023.
  11. ↑ Chokshi, Niraj; Walker, Mark (March 15, 2023). "U.S. Approves $31 Billion Merger of Two Big Railroads". The New York Times. ISSN 0362-4331. Retrieved April 21, 2023.
  12. ↑ https://www.trains.com/trn/news-reviews/news-wire/metra-opposes-cp-kcs-merger-in-regulatory-filing/
  13. 1 2 3 4 "CPKC Drives Ceremonial Final Spike, Joining Three Nations". Railway Age. April 17, 2023. Retrieved April 21, 2023.
  14. ↑ Luczak, Marybeth (April 25, 2023). "CPKC, Knight-Swift Team on Truckload Intermodal Service". Railway Age. Retrieved April 27, 2023.
  15. ↑ Stephens, Bill (April 21, 2023). "CPKC to handle Schneider's cross-border intermodal shipments between the Midwest and Mexico". Trains. Retrieved April 21, 2023.
  16. ↑ Funk, Josh (April 24, 2023). "3 railroads join up to compete with CPKC to serve Mexico". ABC News. Associated Press. Retrieved April 27, 2023.
  17. ↑ https://www.railwayage.com/intermodal/cpkc-launches-mexico-midwest-express-intermodal-service
  18. ↑ https://www.railwayage.com/intermodal/cp-first-lazaro-cardenas-chicago-interline-service-trip/
  19. ↑ "STB sets schedules to consider CPKC, CSX plan to acquire G&W short line". Progressive Railroading. December 20, 2023. Retrieved December 20, 2023.
  20. ↑ Stephens, Bill (June 28, 2023). "CPKC and CSX to create direct interchange via G&W short line in Alabama". Trains. Retrieved August 7, 2023.
  21. ↑ Stephens, Bill (July 10, 2023). "CPKC-CSX deal over Meridian & Bigbee shortcut finally realizes Mike Haverty's vision: Analysis". Trains. Retrieved August 7, 2023.
  22. ↑ "Kansas City Current and CPKC Announce Historic Stadium Naming Rights Agreement - Kansas City Current". www.kansascitycurrent.com. October 19, 2023. Retrieved October 19, 2023.
  23. ↑ "Kansas City Current and CPKC Announce Historic Stadium Naming Rights Agreement". Yahoo Finance. October 19, 2023. Retrieved October 19, 2023.
  24. ↑ Hyatt, Kim (March 21, 2021). "Minneapolis no longer Canadian Pacific's U.S. headquarters in $25B deal". Star Tribune. Retrieved April 21, 2023.
  25. ↑ Stephens, Bill (September 20, 2021). "CP CEO Keith Creel talks historic KCS merger, CPKC name, operations". Trains. Retrieved April 21, 2023.
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