Union Pacific is booting Canadian Pacific out of the EMP domestic container pool.
EMP, which rosters a 44,000-unit fleet of green 53-foot containers, is an interline intermodal partnership between UP and Norfolk Southern. CP, Canadian National, Kansas City Southern, and Florida East Coast also participate in EMP, which allows intermodal marketing companies to book loads across North America.
UP pulled the plug on CP because the proposed CP-KCS merger would create a new single-line competitor to UP in intermodal lanes linking Mexico and Texas with Chicago, according to people familiar with the matter.
CP notified customers about the move on Thursday.
“Canadian Pacific has been advised by the Union Pacific that it has elected to terminate its agreement with CP in relation to the EMP program effective Oct. 8, 2022. As a result of UP’s action, intermodal customers will have one fewer transportation option to move freight between Canada and certain key markets in the U.S. and Mexico,” CP said in a customer advisory. “CP regrets the impact that Union Pacific’s action has on our customers. We will continue to accept billing for loaded interline shipments until Oct. 7, 2022.”
UP informed its customers in a Sept. 9 announcement.
“Effective Oct. 8, 2022, the Canadian Pacific Railroad will no longer be party to the EMP program. As such, customers will not be able to waybill EMPs to or from the CP after this date. UP will however be expanding our relationship with the Canadian National and making them our exclusive Canadian EMP partner,” UP said. “UP and CN will provide service to and from all points in Canada on the CN network. We are collaborating with the CN on service, pricing and equipment allocation to provide a seamless transition to meet your intermodal needs to and from Canada.”
KCS says it’s unaware of any changes to its access to the EMP program in the U.S. and Mexico.
Union Pacific has raised concerns that the CP-KCS merger would reduce competition for cross-border traffic that moves through the Laredo, Texas, gateway. KCS controls the International Railway Bridge across the Rio Grande at Laredo, the busiest rail freight border crossing in North America.
Union Pacific in March asked federal regulators to ensure that the CP-KCS merger does not undermine competition at Laredo, where UP interchanges with KCS de Mexico.
“An unconditioned combination of CP and KCS would likely cause a significant loss of competition, especially for traffic moving via the Laredo Gateway. CP would gain control of KCSM, and thus the ability to increase the costs or reduce the quality of rail service in Mexico for railroads providing shippers competitive options to CPKC north of Laredo,” UP wrote in its 334-page filing.
No good wine comes from the big bully’s sour grapes. If our rail transportation systems would work TOGETHER, maybe we can free up a lane on interstates. Personal vehicles are far out-numbered, making unsafe conditions for all drivers on our roadways.
Greed will bring them to their knees and then they’ll really whine!
This is just “kid stuff” and certainly not the mark of a company that promotes itself as a “leader” in the industry. Just non-sense.
This seems a bit premature. Wouldn’t someone wait until the STB rules before making a business decision like this? Or is this just an attempt to bully CP?
This signals to the world that UP expects the CPKC merger to go through.
UP just handed CP/KC a powerful weapon to negate all of UP’s “anticompetitive – reducing competition” whining in all of its filings to the STB.
I am impatiently waiting to see what BNSF does next about UP cozying up to CN.
Bad look for UP. I hope they realize KCS runs Karma is a b****. Laredo sound familiar?
Bad look for UP. I hope they realize KCS runs the rige to Mexico at Laredo. Karma is a b****.
Sour grapes? It’s more than that; it’s borderline (pun intended) anti competitive. The class ones seem to be inviting a return to the bad old days of regulation.
UP better remember KCS owns the rige to Mexico at Laredo.
OMG Union Pacific Stop Crying Just Because they are Merging Don’t Mean you Own the Border Crossing and Can Tell your Competition How to Operate
11th hour sour grapes. IF UP were serious, they would complained about this back in March.
Yes indeed, sour grapes.
Sour grapes anyone? Wonder if Oberman and the STB would consider including in the approval of the CPKC merger(don’t even know why they’re bothering having all these meetings and reviews, such a waste of time and money) a mandate to allow CPKC to participate in the EMP program? What happens to the containers that CP bought and provided to EMP? (Note: the UP and NS are not the only railroads that bought containers and provided them to EMP as that is how the program was started, I know KCS had to provide some when joining and I believe the other carriers did as well, if I remember from my intermodal days).
Might restencil them as CPPUs