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CP fights paper with paper
CP can pound sand. They will NOT vote my block.
I wonder how EHH departing CP will “help” it?
It will start the merger dominoes falling IMHO. BNSF/CSX would be nice.
According to yesterdays Railway Age News Wire, Matt Rose has already spoken to CSX and NS about The Future and various possibilities that may exist…
Its coming rather you like it or not. It doesn’t matter rather their are steam choo choo trains, old color schemes, etc, etc. What matters is shareholders, customers and the future of the eastern railroads…with declining coal fourtunes NOW IS THE TIME.
I’m looking forward to it BECAUSE I AM A SHAREHOLDER.
The two levels at which US business is conducted will be at war. The one is being in business for the purpose of make something or providing a service of some kind. The second level is building and providing income to stockholders either in higher value stock, dividends, or both. Fans that we are will support the operations of a railroad rather than playing for the stockholders. But we’ve also got to consider that a strong stock and return on investment will assure more railroading operations, secure operations at that. But how are we to judge and choose? In my opinion I believe there is a problem now in lack of competition driving prices up and service down. However, I feel the concept EHH is putting forward is not the best way to assure more competition because the host railroad always has the upper hand. Thus I am hesitant about the STB starting another round of mergers at least until more local shippers…and receivers…and passenger needs are take care of.
It is curious to note, how badly CP wants NS. Yet, EHH implies NS is a operating poorly and not producing enough share value and thereby, needs CP management to correct a bad situation. Makes me think NS is not as “needy” as CP wants all to believe.
Something else is going on at CP. They are not making any valid points for a merger.
Go after trucking and leave NS alone.
CP claims “A CP+NS merger does not create a dominant carrier that would necessitate a reflexive merger in response,” ? What other railroad serves all of Canada and the Eastern US? While they may not be bigger the BNSF or UP but they will still be a serious threat to CSX and CN. Even if BNSF & UP stay out of it, I can’t imagine CN & CSX doing nothing. If he truly wants CP, smallest of the class Is except KCS to grow to compete with CN without upsetting the apple cart, KCS should be his target. However, even going after KCS could result in other mergers and/or competing bids for KCS.
Man, what a surprise! CP (EHH) thinks Hunter should be CEO of the merged company.
The railroad industry is very conservative which generally makes sense for a highly capitalised business. But perhaps the time has come to allow further consolidation and creation of national, transcontinental railroads capable of carrying freight from one side of the country to the other. Transcons would be motivated to solve congestion problems like Chicago by building their own infrastructure or running trains on other routes to offer shorter journey times from coast to coast. These railroads would be more capable of handling time sensitive loads and be more effective competing against trucks.
The risk of consolidation is reduction of competition and increased rates for shippers. The solution might be requiring the transcons to sell their mothballed or low traffic routes to other companies to permit creation of a third or even a fourth national carrier. The transcons would also have to provide trackage rights to access third party container terminals and similar facilities to prevent anti-competitive activities. Perhaps someone will be interested in buying redundant facilities and building a company to own, maintain and dispatch rail infrastructure for trains operated by other parties, somewhat like the UK model. The railroad infrastructure company would make revenue by selling trackage rights to the train operating companies.
Industries have to keep evolving or they die. Change is a necessity not an option.
Railroads needn’t merge to resolve congestion problems in Chicago. God knows there are multiple interchanges available to the four major U.S. Class 1’s that completely avoid Chicago. Although I am seeing more use of alternate interchanges on our traffic, I suspect the reason the shift hasn’t become even more prevalent is money. None of the Class 1’s wants to short haul themselves.
profit margin of coal vs. intermodal business
As presented here on Trains Newswire, everything CP has been presenting about this proposal seems itself to be “based largely on inaccurate assumptions” and “speculation”.
NS seems to be doing quite well competing with CSX, and both Eastern US carriers do much interchange with both Western US carriers; international shipments amongst the four US Class 1’s and the two Canadian roads is small potatoes compared with east-and-west traffic. it would seem that CP may be having difficulty competing with its larger Canadian counterpart.
@ Andrew Chandler and Andrew Falconer: CP sought first, CSX, now desparately wants NS, probably to hide an operating meltdown on CP which is brewing due to EHH-imposed “operating efficiencies”; that’s the only reason that Harrison & Ackman are pushing so hard for this deal. For a good analysis of this whole mess, may I recommend Carl Fowler’s comments under the "Time for NS to ‘talk turkey’ post of Dec. 14 …