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Home / News & Reviews / News Wire / CN asks regulators to force CPKC to divest KCS line linking Springfield, Ill., and Kansas City

CN asks regulators to force CPKC to divest KCS line linking Springfield, Ill., and Kansas City

By Bill Stephens | January 13, 2022

Canadian Pacific disputes need for line sale

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lines on map of Midwest showing CP, CN, and KCS
lines on map of Midwest showing CP, CN, and KCS
Canadian National wants federal regulators to force Canadian Pacific Kansas City to sell it the KCS route linking Springfield, Ill., with Kansas City, Mo., and East St. Louis, Ill. (Canadian National)

(updated Jan. 13, 1:46 p.m.)

MONTREAL – Canadian National wants to acquire Kansas City Southern’s line linking Springfield, Ill., with Kansas City, Mo., and East St. Louis, Ill.

CN today said it would ask the Surface Transportation Board to condition approval of the Canadian Pacific-Kansas City Southern merger on divestiture of KCS’s Springfield Line.

CN promises to spend at least $250 million to create the Springfield Speedway, a new single-line route linking Kansas City with Detroit and Eastern Canada via the Illinois capital.

The funding would beef up CN’s 112-mile former Illinois Central Gilman Subdivision from Gilman, Ill., to Springfield and KCS’s 288-mile former Gateway Western line from Springfield to Kansas City. CN’s Gilman Sub is a 60-mph route with islands of centralized traffic control, while the KCS line is 40-mph dark territory with a sawtooth profile and short passing sidings.

When CN was seeking to acquire KCS, it said its largest single capital investment would be to upgrade the Springfield Line. Now CN argues that acquiring the route would improve service and railroad competition while taking thousands of trucks off the road annually.

“The Springfield Line is a direct competitive alternative to CP’s route from Kansas City to Chicago, and beyond to Detroit and eastern Canada,” CN said in a statement. “CP and KCS have made it clear in their merger application that they plan no investment on the Springfield Line, and instead will de-emphasize it in favor of CP’s existing parallel line.”

CN says that a divestiture of the route would open new international markets to customers by linking Illinois, Indiana, and Michigan manufacturers and farmers to the world. CN added that it would preserve existing competition by providing CPKC with haulage rights access to customers on the route, as well as to interchange with Eastern railroads at East St. Louis.

CN also seeks 8.3% ownership in the Kansas City Terminal Railway; a 50% interest in the KCS International Freight Gateway intermodal terminal in Pittsburg, Mo., south of Kansas City; trackage rights to reach the terminal; and trackage rights between Rock Creek Junction and Airline Junction in Kansas City.

CP, in a statement, said that CN’s “proposal is built on a series of factual errors or misstatements.”

The KCS Springfield Line is not parallel to CP’s former Milwaukee Road route from Kansas City to Chicago, CP notes, and the KCS route ends at Springfield, well short of Chicago.

“Contrary to CN’s misleading statements, KCS’s line is not part of a through route to Chicago in conjunction with CN,” CP said. “In fact, there is no direct connection between KCS and CN today at Springfield, and historic interchange volumes reflect the absence of any actual service here. Only four cars were interchanged by KCS at Springfield with CN in 2020 and 133 cars interchanged with CN in 2019.”

CP said it will not downgrade the KCS Springfield Line or reroute traffic away from the line, which is an integral part of the KCS network and will see 30% traffic growth due to the merger.

The STB has the authority to order the divestiture of parallel trackage as a merger condition.

Link to CN filing: https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1642087383136/303512.pdf

 

17 thoughts on “CN asks regulators to force CPKC to divest KCS line linking Springfield, Ill., and Kansas City

  1. This would replicate the NS (ex Wabash) line so is it really adding that much new competition? The route via Springfield would likely be inferior as it would be longer but hooked up to a better network; CN is transcontinental whereas NS is mostly in the East. Damage could be done to NS I suppose which is already down

    Anybody familiar enough with Springfield trackwork to know how such a change would effect train line consolidation in that city?

    1. JACOB – Springfield is in the midst of a project to streamline routes through the city and to eliminate roughly half of its grade crossings. Unfortunately there don’t seem to be any good ‘before’ and ‘after’ maps to help answer your question. The project website shows the existing routings via a satellite photo with poor resolution while the final configuration is shown in a not-very-detailed sketch. The connection with KCS on the southwest side of the city is outside the boundaries of the map.

  2. I don’t see how this should be a merger condition. Since there is no parallel CP line, no competition is lost. CN would gain Kansas City access but CPKC would lose St Louis access. Still, the line provides only circuitous access to St Louis, so it may not hold a lot of value to CPKC. Perhaps a sale could be negotiated, but I don’t think it should be mandated.

    Considering that CPKC’s route from Kansas City to Detroit is slow and circuitous, maybe CPKC and CN could negotiate a deal that grants CN access to Kansas City, while speeding up CPKS’s Kansas City-Detroit route. CN gets trackage rights to Kansas City from Springfield and St Louis while CPKC gets trackage rights over CN from Springfield to connect with their rights on CSX and NS on the south side of the Chicago area.

  3. CN is crying sour grapes! Why don’t they just admit that sometimes you win and sometimes you lose. Move on!

    1. That’s correct, CN has trackage rights over UP from the junction to Cockrell on the Airline District. And I believe the trackage rights agreement prohibits overhead traffic, so I don’t see how this strategy is even viable!

  4. Actually CN and KCS do connect in Springfield over a very small piece of UP’s St Louis-Chicago mainline. The Illinois Central Gulf (ICG) completed a connection on the south side of Springfield between the former Gulf, Mobile and Ohio (GM&O) St Louis-Springfield line and the Illinois Central (IC) Springfield-Chicago line. It enabled the ICG to run Kansas City and St Louis trains into/from Markham Yard (ex-IC), the post-merger yard for Chicago carload traffic. ICG was able to end a cross-Chicago transfer service to Glenn Yard (ex-GM&O) and ultimately abandon most of the ex-IC line south of Springfield.

  5. CN and KCS exchanged a small but steady volume of traffic via Cockrell Station (SW of Springfield) from late 2013 to at least early 2017. There was far more than 133 carloads annual each year from 2014 to 2016. I suspect this was traffic previously exchanged at Venice, Illinois.

  6. I assumed that the KCS Springfield line was going to be a prime candidate for a shortline sale or lease once merger finalized. Can’t speak for all that is going on in Springfield but have watched a recent overhead/drone video showing the current rail construction through town, new roadbed and rail bridges, as part of the plan to organize UP and NS tracks into one single corridor through town, two tracks each, and build out/location of new Amtrak/intermodal transit station downtown. Construction in full swing.
    ..
    Outside of Springfield it seems like any easy play for CN to make. So why not? It might play well for STB to say that KC went from KCS & CP to CPKCS & CN providing direct access to the KC region even though NS already provide competitive service for KC to the east.

    1. I think that it is two clashing visions for the route, CPKC sees the route as KC to East St. Louis, while CN sees it as potentially a Chicago to KC route. I wonder what the STB would set as the price CN would have to pay CPKC for the route if the STB makes the sale a condition for the merger. I am sure that CN would like to pay as little as possible since for them it would need a lot of upgrades, and I think that CP would see it as CN trying to steal business away from CP.

  7. Track in question was once Chicago & Alton, then GM&O. Later (not in order) it was also IC, then ICG. There were other people operating this line and later GWWR. What I’m coming to it looks as if CN didn’t want this line, so why cry for it now?

    Someone is further confused as CN wants to go to Pittsburg MO which is not on KCS. Let the KCS remain as is in the Kansas City area!!

    1. Exactly. ICG got rid of the line for a reason. Now “they” (in current form as CN) want it back? The merger application reported an average of only 0.13 trains per day (about 1 per week) on the line into Springfield!

  8. When it acquired the Alton in 1929, the B&O became a “western railroad” in the sense that Santa Fe, Burlington, Missouri Pacific, MKT, etc. wouldn’t short haul themselves by interchanging traffic for the eastern terminals with the Alton at Kansas City. I wonder what CN has in mind.

    1. In the CN merger proposal, CN had something in there about a backhaul to Halifax and Port St John – filling empty containers that had broUght consumer goods in to the upper Midwest with agriculture products and talking them for export back to Halifax or Port St John.

      There is also a Ford truck plant in KC – I am not sure if the parts come from Canada or not but if so that would be a large traffic source they could compete for.

  9. The Springfield Rail Project takes several railroads and get them through town more effectively without the historical backups.

    The former Alton which runs right next to the capitol and support Amtrak and UP today, traffic will be moved east where additional tracks are being installed in the NS Yard (former Wabash). That former Alton route has terrible 8 foot (or less) street viaducts (and crossings) and run right next to much of the historic district.

    UP not only runs Amtrak and freights through here, but they also ripped out the former CNW Nelson “South” Line from Girard to Barr and moved it all over to go through Springfield proper. (Before it bypassed Springfield to the west.) This allowed UP to run freight from KC to Proviso without taking it up north on the Gilman Sub and navigate the Chicago mess. When this new plan goes in UP will abandon the line through downtown from Sangamon Ave south to Isles. The Amtrak station will be built new a few blocks east.

    At the same time, Chicago, Illinois & Midland runs coal drags between a power plant at Pawnee (which is closing) and it goes up to Havana and then to Pekin. Those drags *all* pass through Springfield via their own yard just NE of the NS one. The whole town shakes when those multi engine lash ups turn on the juice to get through town.

    As noted above, KCS comes in from the west and uses south bypass to reach the NS Yard on the east side. and not to complicate things further, UP has an arrangement with KCS to bring KC sourced, Chicago destined loads that can’t cross the MacArthur Bridge during its long delayed rehabilitation over Broadway Street in St Louis. They will take KCS to Springfield, use the same bypass and rejoin home rails and then split depending if it goes to Proviso via Nelson or through Joliet.

    The big banana to all this is the intersection of Grand and 15th Street. Today it is a street level crossing where all of this traffic will cross and begin to disperse. Reportedly IDOT has funded a new viaduct of some kind. On Friday nights when nearby Springfield Lanphier football games get out and several through freights come through (especially now with PSR), the whole north side of Springfield turns into gridlock. This is supposed to a bridge that will carry Grand Ave. over all 3 sets of rails and remove a huge impediment.

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