Three railroads join to combat CPKCS merger

Apr 28, 2023

The Falcon Premium rail service consists of Canadian National, Union Pacific, and Grupo Mexico to move goods between the US, Canada, and Mexico.

By Andrew Joseph, Farms.com; Images via Canadian National

To counter the Canadian Pacific-Kansas City Southern (CPKCS) North American merger, three other railroads—one each in the US, Mexico, and Canada—have joined forces.

Known as the Falcon Premium intermodal service, the Canadian National, Union Pacific, and Grupo Mexico railroads have allied to ship goods between the three countries.

Previously, only the CPKCS merger shipped between all three countries.

Reports indicate that the Falcon Premium will dip into Mexico via Grupo Mexico railway’s hubs in Monterrey, Nuevo Leon, and Silao, Guanajuato, and enter the US via Eagle Pass, Texas.

From that US point, the Union Pacific railway lines will be followed up into Chicago, Illinois, and Detroit Michigan, where it will then enter from Detroit into Canada and the Canadian National railway network to move goods east through Toronto, Montreal, Moncton, and ending at Halifax.

To the west, from the Chicago hub, the trains will move to Winnipeg, Regina, Saskatoon, Edmonton (with a spur line to Calgary), and then into British Columbia where it splits into two hubs—Vancouver to the south, and Prince George to the north.

The new joint venture is seen in the intermodal industry as a sharp retort to Canadian Pacific’s acquisition of Kansas City Southern this past March for US$31 billion. The CP deal included Kansas City Southern’s subsidiary—Kansas City Southern Mexico.

The CPKCS merger allows grain from the Midwest to move along the Gulf Coast of the US to Mexico. Of course, it also makes it easier to ship goods from Mexico into the US and Canada—though only to the left coast.

The Falcon Premium venture allows everything from food, appliances, auto parts, and more to move from Canada’s east and west coasts into the US and Mexico, if necessary, and vice versa.

Canadian National

According to a phone call to investors on April 24, 2023, the Canadian National, Union Pacific, and Grupo Mexico representative said its service will be better than CPKCS because Falcon Premium has a more extensive network in Mexico, and has Union Pacific’s direct route to the Chicago hub—long considered a central hub of the US and North America.

Regardless of the “fighting words” from Falcon Premium, both it and CPKCS are hopeful their service will encourage more customer usage over the less fuel-efficient truck transport fleets—at least until it can go travel farther without “refueling” with new powertrain technologies.

Video: The 15-Year Bet Behind Every New Variety!

Canada is trying to decide how much agricultural research capacity it can afford to lose. Brian Rossnagel believes the better question is whether the country can afford to rebuild it.

The longtime barley and oat breeder makes the case with a simple fact about his profession: the consequences of today’s decisions may not become visible for 10 or 15 years.

“Pick the right parents. That’s the biggest thing,” Rossnagel says. “If you pick the wrong parents, you’re not going to get anywhere—and you don’t know that until 10 years, 15 years later.”

That warning carries particular weight as Agriculture and Agri-Food Canada moves to reduce spending and streamline parts of its science operations. The department’s 2026–27 plan anticipates the loss of approximately 665 positions by 2028–29 and says some research will be reduced where capacity exists in academia or industry. AAFC says the changes will make its science operations more cost-effective over the long term.

For Canada’s seed industry, Rossnagel’s career illustrates what is at stake.

This fall, the retired University of Saskatchewan breeder will be inducted into the Canadian Agricultural Hall of Fame. During his 35-year career at the Crop Development Centre, he helped develop more than 100 barley and oat varieties, including CDC Austenson—one of Western Canada’s most widely grown feed barleys. His induction recognizes not only those varieties, but the collaboration and research system that made them possible.

Rossnagel is quick to emphasize that none of it was the work of one person.

“The first thing I thought about was all the other people who contributed to whatever success I and my program had over the years,” he says. “We know that it’s not an individual who does this. It’s a group—a team.”

That team extends well beyond the breeder whose name appears beside a variety. It includes technicians, pathologists, quality specialists, statisticians, regional testing sites, seed growers and industry partners. It also includes the breeders who came before and those who will carry the germplasm forward.

CDC Fraser barley, for example, moved through three breeding careers. Its parents came from Brian Harvey’s program. Rossnagel advanced the material after Harvey retired, and Aaron Beattie later guided it through registration and release.

That kind of handoff is normal in plant breeding. The person who makes the original cross may never see the resulting variety reach farmers.

It also explains why lost research capacity cannot simply be switched back on when budgets improve.

“If you shut it off, it’s very, very difficult—and particularly costly—to start it up again,” Rossnagel says. “If you have to start from scratch, it’s going to be at least 10 years before anybody notices whether you’re getting anything done or not.”

The concern is not simply how many experimental lines Canada can process. Modern equipment, statistical tools and genetic technologies allow today’s breeding programs to evaluate tens of thousands of lines—far more than Rossnagel could handle when he entered the field in the early 1970s.

But efficiency and automation do not generate every idea.

“If you pare back down, and instead of having six or seven individual scientists concentrating on wheat breeding, you go down and say three people could handle all this, well, that’s half the ideas gone,” he says. “Particularly if you happen to lose the three people who had the really neat and innovative ideas, boy, that’s a problem.”

It is a timely distinction for Canadian agriculture. Consolidating programs may preserve the volume of material moving through a system, at least initially. It may not preserve the diversity of thinking, regional knowledge or willingness to pursue unconventional crosses.

That regional knowledge matters because Canadian agriculture is not one uniform production environment. A variety suited to southern Alberta may face different disease, moisture and maturity pressures than one grown in Manitoba, Ontario or Atlantic Canada.

“Agriculture is applied biology,” Rossnagel says. “Biology, all around the Earth, moves from the poles to the equator. It does not move from Newfoundland to B.C. like politics do.”