For several years, seven Class I railroads have operated in North America*. This changed in April when the Canadian Pacific (CP) purchased the Kansas City Southern (KCS) for $31 billion. On April 23, 2023 the two carriers merged into one entity called Canadian Pacific Kansas City. (CPKC). The merger was approved after a stiff competition between the CP and the Canadian National (CN).
This combination will give us the first single line service connecting Canada, the US, and Mexico.
The KCS, founded in 1887, operates 3984 miles in 10 Midwestern and Southern states, including several Gulf of Mexico ports. The line extends to the US/Mexico border where it connects with the Kansas City Southern de Mexico, (KCSM) which serves northern and central Mexico, as well as several Gulf ports such as Tampico and Veracruz and the Pacific port of Lazaro Cardenas,Currently, the KCS is the shortest north/south rail line between Kansas City and the Gulf of Mexico,
Another interesting fact is that the KCS and the Union Pacific are the only two Class I railroads that were not formed from a merger between other railroads.
The CP was constructed between 1881 and 1885, and operates a 12, It 500 miles of track in seven Canadian provinces and some markets in the US It stretches from Vancouver to Montreal and into major markets in the US, including Kansas City.
Particularly interesting is the fact that in this period of recent safety issues in the industry, CP has been the safest railroad in North America for 17 consecutive years. KCS has a solid safety record as well
The merged railroad will be headquartered in Calgary, and while it will still be the smallest of the Class I carriers, it will have a much larger network, operating about 20.000 miles of track.
Also it will be unique in that it is an end to end merger, with no redundant facilities or track age. The merger also will open new Amtrak routes.
CPKC already has announced a multi-year agreement with Schneider National to provide single-line intermodal service to Mexico, Schneider will begin to transition their Mexican traffic next month.
Capac’s bridge over the Rio Grande is a very reliable alternative to highway crossings of the border. A second span is being added to the bridge is being added and is expected to be completed in 2024. It is quite likely that other carriers will find this service a very efficient way of serving Mexican destinations. The same advantages will apply to traffic moving from Mexico into the US.
In approving the merger, the Surface Transportation Board said; “The Board expects that this new single-line service will foster the growth of rail traffic, shifting approximately 64,000 truckloads annually from North American roads to rail, and will support investment in infrastructure, service quality. and safety.” The Board went on to say, “Indeed, approval of this transaction may enhance safety for the nation as a whole” and that “thus any traffic diverted to CPKC from other railroads will likely mean traffic moving to a railroad with a better safety record.
* Canadian National, Canadian Pacific, BNSF, Norfolk Southern, Union Pacific, KCS,
and CSX