CPKC opposes ‘transcontinental’ rail consolidation
Canadian Pacific Kansas City (CPKC) has said it opposes further consolidation in the rail industry in North America, following the announcement of the potential merger between Union Pacific and Norfolk Southern.
While the company’s statement didn’t explicitly refer to the Union Pacific-Norfolk Southern talks, it criticises a “transcontinental merger”. If the merger of Union Pacific (UP) and Norfolk Southern (NS) is successful, it would see two of the largest Class I railroads create a single trans-coastal railroad in the US, making it the first modern coast-to-coast freight operator in the country.
CPKC said it is “not interested in participating in immediate rail industry consolidation” and that it doesn’t believe it’s necessary for the industry, despite CKPC being formed via the merger of Canadian Pacific and Kansas City Southern just a few years ago.
The rail company added that any major rail merger “poses unique and unprecedented risks to customers, rail employees and the broader supply chain,” and that those risks would be “exacerbated by the inevitable follow-on consolidation”.
In the statement, the company’s president and CEO Keith Creel said: “We believe that a transcontinental merger would trigger permanent restructuring of the industry and result in a disproportionately large railway whose size and scope would require others to take action. This would likely result in an unnecessary wave of railway mergers that today is not the best way to support American businesses nor the public interest and has the potential to create more issues than it solves.”
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Instead, the firm said that further opportunities for growth in the sector can be achieved through new and expanded industry partnerships and additional cooperation among the country’s six other existing railways. As an example of this, CPKC highlighted its recent collaboration with CSX on linking the US Southeast to Mexico.
The proposed merger between UP and NS would reduce costly interchanges between the Midwest and the two coasts, but could negatively affect the competitiveness within the market, which is something that the Surface Transportation Board (STB) will weigh up when making its decision on whether to allow the deal to be completed. A lack of options in the market gives the railroad more pricing power to set higher rates for the likes of automotive customers.
The UP-NS merger will likely take some time to come to fruition, with the two companies required to file a pre-notification before STB would start an extended, detailed review, which would typically take 16 to 22 months, before a decision could be issued. Since formal filing is pending, the earliest approval likely wouldn’t arrive until late 2026, stretching into early to mid‑2027.
CPKC declined to comment further.
