CN to STB: CP acknowledges divestiture of KCS line would increase competition

CN late last week filed its last document with the Surface Transportation Board prior to the board’s September hearing on the proposed $31 billion merger between Canadian Pacific and Kansas City Southern.

In its filing, CN states how its proposal for the divestiture of KCS track to CN between Kansas City, Missouri, and Springfield and East St. Louis, Illinois, would — in CN’s view — create greater competition through the development of a new single-line service between eastern Canada, Detroit, Chicago and Kansas City.

CN proposes investing $250 million in the line. CP opposes CN's proposal for divestiture of the line. In its Aug. 12 filing, CN highlighted CP's statements in its July 13 STB filing, which note that CN control of the track would create competition with CPKC’s service between Kansas City and Chicago.

"In his reply verified statement, CP’s President and CEO Keith Creel acknowledges that CP opposes CN’s responsive application because CN would 'poach some of the traffic opportunities that CPKC would otherwise pursue in the Kansas City-Chicago lane,'" CN’s filing states.

CN would upgrade the line used to connect Kansas City directly with key automotive and intermodal markets in Michigan and eastern Canada, CN adds.

"CP, on the other hand, has no capital investment plans for the line besides basic maintenance," the filing further states.

To read the entire CN filing in the case, click here.