WASHINGTON — As part of their review of the Canadian Pacific-Kansas City Southern merger, federal regulators will consider requests for conditions from Canadian National and Norfolk Southern.
The Surface Transportation Board on July 1 said that it has accepted the so-called responsive applications from CN and NS.
CN has asked the board to force CP to divest KCS’s former Gateway Western lines linking Springfield, Ill., with Kansas City and St. Louis. This would allow CN to create a new single-line service route between Eastern Canada, Detroit, and Kansas City.
CN says it would invest $250 million on the line and would ultimately divert 80,000 truckloads to intermodal annually. CN also requested short segments of trackage rights on KCS, particularly to reach its intermodal terminal just south of Kansas City.
NS has asked the board to impose various conditions that would protect its intermodal service on the NS-KCS Meridian Speedway joint venture.
The merger threatens to degrade intermodal service on the Meridian Speedway that serves as a shortcut between the Southeast and Southwest, NS told federal regulators last month.
NS and KCS currently operate interline intermodal trains over the Meridian, Miss.-Shreveport, La., Meridian Speedway. KCS handles the NS trains over its Shreveport-Wylie, Texas, main line on a haulage rights basis.
NS is seeking trackage rights between Wylie and Shreveport that would kick in only if Canadian Pacific Kansas City’s service deteriorated. NS wants the board to enforce CP’s promises to support KCS’s existing interline agreements. And it has asked regulators to make CP commit to making “no significant detrimental changes to current operations on the Meridian Speedway.”
The board said that the requests by CN and NS met regulatory standards, so it had no basis to reject them.
Does NS realize that CN is requesting routes that will allow it to DIRECTLY compete with NS?
NS will likely have the shorter route, mileage-wise and avoids the black-hole of Chicago.
What CP could do is offer CN trackage rights on Gateway Western Springfield to KC in exchange for trackage rights on CN from Springfield to Chicago and South Bend, Indiana where CN crosses NS. At that point CP could access their existing trackage rights on NS to Detroit.
Whatever. Maybe NS and CP/KC should talk to each other. (And for all we know, this may be happening behind closed doors). I’ve said from the beginning that CP-KC needs a better route from West Detroit to KCMO. In other words, rights over NS. Then NS gets something in return, like maybe improvements to the Meridian Slow-way.