Canadian Pacific Railway (CP) has shut down last week’s media buzz about any possibility of a merger with the third biggest railway in the U.S.
The Wall Street Journal and other media recently reported Calgary-based CP and Jacksonville-based CSX had held “exploratory talks” about combining their operations. [Related story]
CP on Monday confirmed it had held “exploratory conversations held with CSX… about a possible business combination.” However, CP added in the same release, those talks have ended and no further talks are planned.
CP said Monday it had proposed what it described as “an integrated coast-to-coast combination that would improve customer service, promote competition, alleviate congestion in North America — specifically the key Chicago gateway — and generate significant shareholder value.”
At least one rail industry observer recently described the Chicago area as a “roach motel” of rail traffic in which anything can enter but nothing can easily leave.
With less interswitching required between railway companies, CP said a merged player would be able to offer “creative alternatives for shippers, greater fluidity, increased capacity and improved efficiency industry-wide.”
The rail industry, CP said Monday, is “confronted today with the challenges of moving more freight than ever and the prospect of moving even more as oil production, crop yields and consumer demand grow alongside the economy.”
While others in the industry have contended big rail mergers would hinder rather than help improve service, CP said Monday it’s “convinced that the significant problems that beset the industry now will only worsen over time if solutions aren’t put in place immediately.”
To that end, the company said, a “pro-competition, customer-friendly, safety-focused railway combination is one such solution that could not be ignored on its merits” by federal antitrust watchdogs. — AGCanada.com Network
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