MONTREAL, QUEBEC, CANADA – Canadian National Railway (CN) on Jan. 12 submitted a responsive application with the Surface Transportation Board (STB) asking that any approval of the pending Canadian Pacific Railway (CP) merger with Kansas City Southern (KCS) be dependent on the divestiture of KCS lines from Kansas City, Missouri, US, to Springfield and East St. Louis, Illinois, US, to CN, pursuant to the STB’s statutory authority to order “the divestiture of parallel tracks” as a merger condition.

CN, which last year lost a bidding war with CP to merge with KCS, said the route in question, also known as the “Springfield line,” is a direct competitive alternative to CP’s route from Kansas City to Chicago, Illinois, US, and on to Detroit, Michigan, US, and eastern Canada.

CN said CP and KCS have made it clear in their merger application that they plan no investment on the Springfield line, and instead will de-emphasize it in favor of CP’s existing parallel line.

“Putting the Springfield line under CN’s control represents a major opportunity to improve transportation options, promote rail-to-rail competition, and take many of thousands of long-haul trucks off the road annually through increased rail-to-truck competition,” CN said. “CN’s plan for the line will benefit all stakeholders and will advance CN’s continual efforts to ensure competition and choice in our industry, while also creating new jobs and economic opportunities in the region.”

Specifically, with the Springfield line, CN said it will:

• Make investments of at least $250 million in the line, including terminal upgrades;

• Take many thousands of trucks off the road, reducing congestion and emissions;

• Promote competitive options for customers, including automotive and intermodal traffic, which will lead to increased economic prosperity for the Midwest in line with the goals of President Biden’s executive order on competition;

• Open new international markets to customers, including safely and reliably linking Illinois, Indiana and Michigan manufacturers and farmers to the world; and,

• Preserve all existing competitive options by providing KCS access to customers on the line.

Under CN’s proposal, CN would make necessary capital investments to improve operating speed and terminals, yield environmental benefits, and provide additional pro-competitive options and access for auto and intermodal customers.

Earlier in 2021, it appeared that a merger would take place between KCS and CN after CN submitted a much higher bid than CP for KCS. But in September, CP upped its offer to $31 billion, still shy of CN’s bid of $33.6 billion, but enough to convince KCS to accept the CP proposal. A month later, Jean-Jacques (JJ) Ruest announced that he would retire as president and chief executive officer and as a member of the board of directors of the company, effective as of the end of January 2022.