Stakeholders from the Upper Midwest to Gulf Coast Among List of 330-plus Saying CN-KCS Combination Would Reduce Shipping Options
CALGARY, AB - Canadian Pacific Railway Limited today announced that grain and other shippers across North Dakota, South Dakota and Minnesota have submitted letters to the Surface Transportation Board ("STB") opposing Canadian National ("CN") and Kansas City Southern's ("KCS") combination, its use of a voting trust, or both.
The economy in the U.S. Upper Plains depends on agriculture and 80 percent of the grain leaving the region moves by rail. The letters describe how a potential CN-KCS combination and its proposed use of a voting trust would see reduced options for agricultural shippers in the Upper Midwest leaving them fewer direct competitive options, and eliminating the new network of shipping options a CP-KCS combination would create.
Excerpts from the letters written by agriculture industry associations representing hundreds of farmers, grain elevator operators, and other agribusinesses involved in grain, feed, fertilizer and farm supply products included:
"…CN would get stronger by absorbing KCS's system, much of which is broadly parallel to CN's existing U.S. network. This implies rationalization of assets, not investment in new competitive routes. And it implies a loss of competitive options – both concrete multi-railroad access to individual shippers and more subtle benefits of having multiple railroads near one another to serve as 'geographically competitive' options for transload shipments, grain moving to alternate elevators/terminals, build-ins and build-outs, and other means." -- North Dakota Grain Growers Association
"The costs of allowing a voting trust here, however are quite significant…First, from our perspective, the most significant cost associated with allowing CN to use a voting trust to complete its acquisition of KCS is the adverse impact that would have on existing competition between KCS and CN." -- Minnesota Grain & Feed Association
"Ultimately, we agree with the U.S. Department of Justice's observation that 'threats to competition would be present immediately after the CN voting trust is consummated.'" -- South Dakota Grain & Feed Association
On Monday, June 21, CP submitted letters to the STB on behalf of concerned stakeholders across North America, bringing the total letters and statements expressing concern about CN or the use of a voting trust to more than 330. That includes shippers that could lose shipping options in the New Orleans to Baton Rouge corridor if CN's voting trust is approved.
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