Canadian Pacific Kansas City

Canadian Pacific Kansas City Limited, doing business as CPKC, is a Class I railroad in North America that resulted from the merger of Canadian Pacific Railway (CP) and Kansas City Southern (KCS) on April 14, 2023. It is the first and only single-line railway connecting Canada, Mexico, and the United States, operating approximately 32,000 kilometres (20,000 mi) of rail across the three countries. CPKC is headquartered in Calgary and led by Keith Creel as President and CEO.

Canadian Pacific Kansas City
Map showing two former Class I railroads combined, CP and KCS, which is now CPKC
CPKC system map, showing CP tracks in red and KCS in black. Does not include trackage rights.
Overview
HeadquartersCalgary, Alberta, Canada
Key peopleKeith Creel (President and CEO)
LocaleCanada, Mexico and United States
Dates of operationApril 14, 2023 (2023-04-14)–present
Predecessor
Technical
Track gauge1,435 mm (4 ft 8+1⁄2 in) standard gauge
Length32,000 km (20,000 mi)
Other
Websitecpkcr.com

History

Canadian Pacific Railway (CP) announced on March 21, 2021, that it was planning to purchase Kansas City Southern (KCS) for US$29 billion. A competing offer was made by Canadian National Railway (CN) on April 20, 2021, at $33.7 billion.[1] CN's merger attempt would be blocked by a ruling by the US Surface Transportation Board (STB) in August 2021 that the company could not use a voting trust to assume control of KCS, due to concerns about potentially reduced competition in the railroad industry.[2]

On September 12, 2021, KCS accepted a new $31 billion offer from CP. Though CP's offer was lower than the offer made by CN, the STB permitted CP to use a voting trust to take control of KCS.[2] The voting trust allowed CP to become the beneficial owner of KCS in December 2021, but the two railroads operated independently until receiving approval for a merger of operations from the STB.[3][4] Final approval of the deal was granted on March 15, 2023, and the merger was completed on April 14, 2023.[5][6]

The CPKC shield, featuring a beaver and maple leaf, both national symbols of Canada. The initials of the three preceding railroads are also visible.

The merger created the first and only single-line railway connecting Canada, the U.S. and Mexico with an approximately 32,000-kilometre (20,000 mi) network.[7] Fully integrating the two railroads is expected to take up to three years.[7]

The company announced on April 21, 2023, that it had landed its first major contract, handling Schneider National intermodal traffic between the U.S. and Mexico. On April 25, it signed a similar agreement with Knight-Swift.[8] The announcement was seen as backing up pre-merger projections that CPKC's single-line service would enable it to compete in the Chicago–Mexico corridor that had been dominated by the Union Pacific Railroad and BNSF Railway.[9] In response, on April 24, Union Pacific responded by announcing a partnership with Canadian National Railway and Grupo México (owner of Ferromex and Ferrosur) to work together to accelerate the exchange of intermodal traffic between Mexico and Chicago or further north into Canada.[10]

Operations

CPKC operates approximately 32,000 kilometres (20,000 mi) of rail across Canada, Mexico and the United States.[7] As of April 2023, CPKC has around 20,000 employees.[7] CPKC has its global headquarters in Calgary with its U.S headquarters in Kansas City, Missouri, and its Mexico headquarters in Mexico City and Monterrey.[11]

Company executives said that merging CP and KCS would be "straightforward" because the railroads only touch at Kansas City and interchange volumes were relatively low, about four trains per day as of September 2021. They also cited that the two companies largely used the same back-office information technology systems.[12]

References
  1. "CN steps up with $33B offer for Kansas City Southern, besting CP's $25B bid". CBC News. April 20, 2021.
  2. "Kansas City Southern picks Canadian Pacific's $31 billion bid for railroad". CNBC. September 12, 2021. Retrieved September 13, 2021.
  3. Kaberline, Brian (March 16, 2021). "Regulator orders pause in consideration of Canadian Pacific-KC Southern merger". Kansas City Business Journal. Retrieved July 4, 2022.
  4. The great train takeover. Financial Tribune (Video). May 2, 2022. Retrieved July 4, 2022.
  5. Reynolds, Christopher (April 14, 2023). "CP Rail, Kansas City Southern merger clears path for more cargo, but hitches remain". CBC News. Retrieved April 18, 2023.
  6. Chokshi, Niraj; Walker, Mark (March 15, 2023). "U.S. Approves $31 Billion Merger of Two Big Railroads". The New York Times. ISSN 0362-4331. Retrieved April 21, 2023.
  7. "CPKC Drives Ceremonial Final Spike, Joining Three Nations". Railway Age. April 17, 2023. Retrieved April 21, 2023.
  8. Luczak, Marybeth (April 25, 2023). "CPKC, Knight-Swift Team on Truckload Intermodal Service". Railway Age. Retrieved April 27, 2023.
  9. Stephens, Bill (April 21, 2023). "CPKC to handle Schneider's cross-border intermodal shipments between the Midwest and Mexico". Trains. Retrieved April 21, 2023.
  10. Funk, Josh (April 24, 2023). "3 railroads join up to compete with CPKC to serve Mexico". ABC News. Associated Press. Retrieved April 27, 2023.
  11. Hyatt, Kim (March 21, 2021). "Minneapolis no longer Canadian Pacific's U.S. headquarters in $25B deal". Star Tribune. Retrieved April 21, 2023.
  12. Stephens, Bill (September 20, 2021). "CP CEO Keith Creel talks historic KCS merger, CPKC name, operations". Trains. Retrieved April 21, 2023.
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