Two major railroads have merged to create a new, larger railroad.
Canadian Pacific and Kansas City Southern have officially merged to create a new Class I railroad called “Canadian Pacific Kansas City” (CPKC) with its global headquarters located in Calgary, Alberta.
The merger was approved by the Surface Transportation Board on March 15, 2023, and the new company’s name became effective on April 14, 2023. The merger is expected to be fully integrated over the next three years, and to bring benefits to customers, employees, and shareholders by creating a more efficient and competitive rail network.
The merger will create the first and only single-line rail network connecting Canada, the United States, and Mexico, covering 20,000 miles of rail.
CPKC President and CEO Keith Creel stated:
“This unmatched CPKC network will give our customers new options and expanded reach to more markets as we provide reliable rail service, take trucks off public roads and raise the bar on rail safety by expanding CP’s industry-leading safety practices. The public, environmental, competitive, and safety benefits of this historic combination are extraordinary for our railroaders, communities, rail customers, and the North American economy.”
CPKC has also pledged to support Amtrak’s expansion plans and invest in infrastructure improvements, which will allow Amtrak to add new passenger routes, including a direct connection between Canada and Mexico.
Will the merger hurt competition and pricing?
While some concerns have been raised about the impact on competition and pricing, CPKC has argued that the merger will increase competition by creating a third major rail network in North America, alongside Union Pacific and BNSF. The Surface Transportation Board approved the merger with conditions, including the requirement that CPKC divests certain overlapping rail lines to preserve competition.
The merger is a strategic move by Canadian Pacific to expand its presence in the United States and Mexico, as the merger with Kansas City Southern will give Canadian Pacific access to key markets in Mexico.
The creation of a new rail network connecting the three countries will have far-reaching implications for the transportation of goods and people across the continent. It will create new opportunities for growth and investment in the rail industry, benefiting the communities and businesses that rely on it.