This is not meant to start another of the mega-merger debates, but…
At this point in time, would there be anything to be gained by CN (/IC) merging KCS? Would there be any real advantage for a railroad to have a 3-country international route in North America?
CN has a marketing agreement through Jackson, MS with KCS that seems to be working. CN has the ca***o by KCS at this time but seems to be holding off. I’ll guess they think KCS is too pricey right now.
I would like to hear an update on this-
So why buy the cow, when the milk is free?[;)] If CN is possibly waiting for the price of KCS stock to become more affordable, won’t other railroads want to buy it too- and run the stock price up in a bidding war?[:P]
I would think CN’s level of interest in acquiring KCS would depend on how well their marketing agreement thru Jackson, MS is working, how much traffic they interchange there, how much potential traffic there appears to be from Canada to Mexico and from the U.S. to Mexico (and vice versa), KCS’s stock price, how different the corporate cultures of the two companies are, and several other factors. Don’t know what kind of shape KCS’s track is in now or how much money needs to be spent on it, but that definitely could be a factor. My GUESS (and it’s strictly a guess) is that KCS’s up-and-down profile over the Ozarks is one of the things keeping them independent - that is tough country for railroading. A purchaser could move the traffic to a parallel line with an easier profile or do what Southern did to the “Rathole” in the early 1960’s, but the cost of the latter would be fearsome.
As to rebuilding the line between Victoria and Rosenberg, don’t know anything other than KCS bought the right-of-way from UP/SP as a condition of the merger and has wanted to reinstall the track ever since. To reinstall 80 miles of track at a cost of +/- $1 million per mile would be a significant expenditure, and so far KCS hasn’t been able to manage it because of expenditures related to its Mexican acquisition. Probably not a huge big deal for CN, so it may not be a stumbling block.
Just out of curiousity, how busy is the former IC from Chi-Louisiana?
Can’t say for the route you indicated, but I do know that the Chicago to Superior line is nowhere near as busy as it was a few years ago.
However, I believe the change in traffic density has more to do with CN rerouting some of their trains to avoid the Chicago congestion, rather than due to a decrease in business.
Farmer:
My info is not iron clad abosolute, but for the most part the former IC line has some capacity.
From what I have heard there are about 20-25 trains daily on the north end. There are two Amtraks each way and the NS runs a couple of trackage rights trains down to Gilman.
There are several CN trains that turn the corner, running from Ontario to points south:
396/397 are Memphis-Toronto manifests
398/399 are Toronto - Salem, Il (UP) manifests that run to Kinmundy.
Also there is a 271 auto rack train that turns the corner.
I am not sure these days what kind of traffic patterns there are on the former IC into and out of Chicago. Quite a bit of the classification is done at Champaign, instead of Markham. It would be interesting to get the big picture on the operations. If someone can post it, I would appreciate it.
Remember too that at Edgewood, their cutoff line heads straight south, so there is quite a bit of capacity south of Effingham. My guess is the recent agreement with BNSF has quite a bit to do with using the under utilized line thru Centralia.
ed
MP173, no I didn’t hang on to my IC stock. When I left, 20 years ago, I thought it was dead and gone. That E. Hunter guy deserves a lot of credit.
A Memphis-Toronto train? Who’d a thunk it.
The operating guys always did like that Edgewood cutoff line the best. It has a mile long tunnel. In Illinois! I slept through that tunnel twice. Once on the head end of CM-1, and once up front on #51 Intermodal. But I was awake for that huge bridge over the Ohio River.
We didn’t need the double track. No one could even begin to make a case for keeping it. The operating guys ran it by those of us in marketing, and we couldn’t come up with any traffic growth forecast that justified keeping the DT. Illinois coal has too much sulpher to burn in Chicago generating plants - at least by itself. The 100 mph passenger business (I’m not kidding!) was gone. Time to reduce capcity to the business level you’re going to have.
The old IC had two tunnels in Illinois. (Motto: “The Flat State”). Again, who’d a thunk it. The other was on a curve at E. Dubuque where we diverged to the right off a line shared (we owned it then) with the BN, curved through the tunnel, crossed the BN, and then went across the Mississippi on a much less impressive bridge.
Trains ran an article several months back about possible megre combonations between various railroads. What I got from the article is that KCS is sort of the odd man out. While they have the direct connection to Mexico, they do not really fit in well with anyone. The article was very well written and gave pros and cons to each merger pair.
My thought on CN’s next move will be to get with NS and purchase what compliments each other from CSX. What CN or NS does not want will go to shortlines such as the Wheeling and Rail America.
Just my two cents. (If it’s worth that much.)
Saxman
I have lived in close proximity to the old Soo Line and have watched traffic dwindle away when the Milwaukee Road was bought, and then regain as Wisconsin Central. Now it has comparitively exploded with southbounds on steetcar headings-somtimes every 20 minutes-a long freight blows thru town loaded with primarily grain and lumber. I dont think the Mexican economy is robust enough for a full blown takeover of KCS by our nothern neighbors but traffic southbound is certainly booming. Engines from NS are commonly lashed to CN units and these are long consists…