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 Post subject: Railroad Merger Thread
PostPosted: Thu Jan 08, 2015 1:22 am 

Joined: Thu Feb 04, 2010 11:37 pm
Posts: 219
Location: Detroit, Michigan
Seems like some of us including myself didn’t know Canadian Pacific (CP Rail/CPR) was quietly trying to perform a “Shotgun Wedding” recently with Norfolk Southern (NS) & CSX Transportation (CSXT). I originally caught whim of this from last month from my copy of the Michigan Railroad Club Newsletter. When I first read about it I was thinking…”Oh CP & CSXT are trying merge…So What…Big Deal…”.

Then I’ve been recalling back CP’s recent business dealings…selling off trackage:

- Dakota, Minnesota, & Eastern west of Tracy, Minnesota to Genesee & Wyoming
- Delaware & Hudson from Sunbury, PA to Schenectady, NY to Norfolk Southern

The few nights back while Train Watching with my co-worker/friend in Plymouth, Michigan I saw the mega size CSXT Q326 (Chicago -> Grand Rapids) freight train with CP 9142 EMD SD9043MAC diesel locomotive. Again, I was happily thinking “Oh, what a nice long and large freight train with extra CP diesel power” But also got me thinking harder “Maybe CSX is really merging with CP”

So here some articles about CP Rail’s Merger Dealings:

1st Attempt: Norfolk Southern (NS)

“Norfolk Southern shares rise on CP merger speculation” By OSHUA FINEMAN AND SAIJEL KISHAN, Nov. 07 2014, Globe & Mail
http://www.theglobeandmail.com/report-o ... e21495566/

“Major CP investor suggests railroad could buy NS” By Mark Szakonyi, Nov 07, 2014, Trade & Container Shipping News
http://www.joc.com/rail-intermodal/clas ... 41107.html

“Norfolk Southern CEO says big railroad mergers don't make sense, aren't needed” By FOX Business/A.P.
http://www.foxbusiness.com/markets/2014 ... nt-needed/

2nd/Final Attempt: CSX Transportation (CSXT)

“Canadian Pacific approached CSX about merger deal”, By DANA MATTIOLI, LIZ HOFFMAN, &DAVID GEORGE-COSH, MARKETWATCH/WSJ, Oct 13, 2014
http://www.marketwatch.com/story/canadi ... 2014-10-13

“CSX Rejects CP Merger Proposal”, By William C. Vantuono, Railway Age, October 13, 2014
http://www.railwayage.com/index.php/fre ... posal.html

“What Lurks Behind Hunter Harrison’s Door?”, By Frank N. Wilner, Railway Age, October 14, 2014
http://www.railwayage.com/index.php/blo ... pened.html

“CP + CSX: “No further talks are planned”, By William C. Vantuon, Railway Age, October 20, 2014
http://www.railwayage.com/index.php/reg ... 80%9D.html

“Canadian Pacific Pushes For Mergers After CSX Talks End”, By Frederic Tomesco, Bloomberg, Oct 20, 2014
http://www.bloomberg.com/news/2014-10-2 ... h-csx.html

Mega Railroad Merger Discussions:

“Class I CEOs diverge on the merits of mergers”, By William C. Vantuono, Railway Age, October 22, 2014
http://www.railwayage.com/index.php/reg ... rgers.html

“2015 OUTLOOK: Can we handle it?”, By William C. Vantuono, Railway Age, December 09, 2014
http://www.railwayage.com/index.php/man ... le-it.html

“The merger puzzle”, By Michael W. Blaszak, Trains Magazine, October 13, 2014
http://trn.trains.com/railroads/2014/10 ... ger-puzzle

Commodities are the driving force behind any merger to occur right now. The current top railroad commodities are: Crude Oil, Intermodal, Coal, & Grain. Of these 4 Crude Oil is the hottest commodity right now. As wise man once said it’s also about “Location, Location, & Location!” Instead of all “Roads Leads To Rome” it should be really “All Railroads Leads To Chicago”. Chicago, Illinois is going be the next battleground in any form rail merger. One railroad in particular Canadian National wants to be North America’s dominant carrier centralized it rail network in a shape of a large “T” stretches from both Canadian coasts and down to New Orleans, Louisiana.

Another railroad Norfolk Southern has a de-facto alliance with BNSF Railway in order to obtain Crude Oil from South Dakota. An NS oil train starts from South Dakota and travels southeast on BNSF to Chicago. From Chicago, eastbounds travels to the PBF Refining in Delaware. The empty oil trains returns to westbound to Chicago, and northwest again on the BNSF to S.D. starts the cycle over again.

Oil Change International – Rail Map
http://priceofoil.org/rail-map/

The railroad commodity near me which is the biggest is Automotive Parts & Automobiles for the areas in around Detroit, MI. The Detroit Rail Market is 1 of 3 areas where areas where Conrail Share Assets exists. The other 2 areas being that of New York City/Northern New Jersey & Philadelphia/Southern New Jersey. The reason Conrail was “Spilt” instead of totally out right “Merge/Taken Over” by either NS or CSX was to Preserve Competition. Most or all railroads in this region utilized the CRSA trackage.

Detroit is considered an International Gateway for transcontinental traffic, mostly Chicago <-> Montreal aka “Canadian Corridor”. CP Rail traffic uses NS trackage and the Michigan Central Detroit River Tunnel to get to Windsor, Ontario, Canada. CN has their St. Clair River Tunnel up in Port Huron, Michigan and Sarnia, Ontario. Amtrak serves only Detroit and VIA serves only Windsor. No passenger trains run between neither city nor crosses the border. As far western railroads operations in Detroit Area usually as follows: UP Pacer Stack Trains on CSX from Mexico and BNSF Coal Trains on CN, CSX, & NS from the Power River Basin.

Conrail Share Assets

Wikipedia/Conrail Shared Assets Operations
http://en.wikipedia.org/wiki/Conrail_Sh ... Operations

Conrail Break Up Maps
http://broadway.pennsyrr.com/Rail/Conrail/

Conrail Detroit Share Asset Area
http://knorek.com/RR/SAA/SAAIndex.htm

Here’s what I sort of cooked up after looking at the Trains Magazine merger article:

Railroad Mega Merger =

KCS Question

- BNSF +

- CN +

CP +

- CSX

- NS

UP +

Canadian Pacific Question

- BNSF

- CSX +

KCS +

NS +

UP +

Canadian National Question

BNSF +

- CSX

NS +

- UP

East + West Combos

BNSF Question

NS +

- CSX

Union Pacific Question

CSX +

- NS

Trifecta Combos

BNSF+CN+NS

CP+CSX+UP/KCS

Questions:

How would mega railroad mergers effect railway/railroad preservation?

Would there be more or less mainline steam?

Would mega railroad mergers create total monopolies?

Would there be any railroad competition be allow?

How would Class II & III railroads fair?

How would Passenger railroads fair?

Who would be the Winners & Losers?

Thank You. Enjoy! ^_^

_________________
http://www.youtube.com/user/jrahrig
http://www.michiganrailroads.com/MichRR ... ubHome.htm
http://www.bluewaternrhs.com/


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