Canadian Pacific hasn’t given up hope of merging
with Norfolk Southern. In January it issued a white paper outlining the reasons
why it still thinks it’s a good idea.
The white paper, titled "The Opportunity to
Alleviate Congestion in Chicago," was sent to the U.S. Department of
Justice.
In it the railway argues that its proposed merger with
NS will alleviate congestion in the key rail hub of Chicago, "where
gridlock in the winter of 2013-14 hobbled the industry for months and
threatened to hinder the U.S. economic recovery."
According to the paper, a CP-NS merger would reduce
congestion and create capacity in Chicago by providing options to shift traffic
to alternative routings, which would also serve to relieve pressure across the
network.
It would also make operational improvements by moving interchanges now in Chicago
to underutilized hubs outside the city.
The paper notes that Chicago is the most critical
freight hub within North America's rail system, with about 25 percent of all U.S. rail freight traffic travelling through the city.
“Today, this hub is a chokepoint for rail freight
and passenger traffic as capacity in the region is constrained,” the paper
states.
“On a good day, it takes a train on average 30 hours
to get through Chicago, about the same amount of time it takes the same train
to travel from Chicago to the East Coast."
With freight volumes expected to double by 2025, “this
is a problem that must be addressed now. Otherwise, the next Chicago rail
crisis is inevitable."
A CP-NS combination would “provide both the
flexibility to avoid Chicago and the ability to improve operations in Chicago,
which will be of enormous benefit to CP and NS customers,” the paper states,
and also for customers of other railroads.
The result would be “a stronger and more resilient
rail network better able to avoid and recover from future service disruptions.”
Read the full white paper here.
Read the full white paper here.
Photo credit: Nick Suydam. Check out his website for more great Chicago and area photos.
It's been reported that CP <==> NS interchange is only around 900 cars daily, a small drop in the overall Chicago bucket. (Sorry, not able to find the source where I read that right now). Two-thirds of that was/is unit trains and the remainder moves in one pair of direct trains and a small portions of trains already running to BRC Clearing yard.
ReplyDeleteThe white paper seems to focus more on specific solutions EHH might pursue if he were in charge and not so much on anything directly stemming from CP+NS being one company.
Time will tell if this argument wins the day; I suspect the desires of Wall Street (e.g. large investors) will look past these nitty-gritty details.