North America is getting its first freight rail network linking Canada, the U.S. and Mexico, and its first consolidation-triggered overhaul in two decades. The Wall Street Journal reports that U.S. regulators approved Canadian Pacific Railway’s acquisition of Kansas City Southern March 15, in a $28 billion deal.
The Surface Transportation Board’s approval came with a range of conditions aimed at protecting competition in rail transport, and safeguarding the interest of shippers.
The combined network will total about 20,000 miles of track, including 8,600 miles in the U.S. The broad north-south coverage could reset some shipping strategies, and TD Cowen analyst Jason Seidl wrote in a report it could draw traffic away from U.S. West Coast ports to gateways in Canada and Mexico.
Regulators also expect the larger network to draw tens of thousands of shipments away from trucks, an environmental selling point for the combination.
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