Mar 2021

Pending Rail Merger Could Help N.A. Auto Industry

With the pending Canadian Pacific Railway Ltd.;s agreement to buy Kansas City Southern, the hopes are that it will lead to more efficient and cost-effective delivery of new vehicles throughout Cnada, the U.S. and Mexico.

“Rail is a key piece of the overall transportation network, and if this merger increases options for the industry and lowers costs and makes the overall system more efficient, that’s fantastic,” Brian Kingsten, head of the Canadian Vehicle Manufacturer’s Association said.

The transaction, if approved, would give the Canadian carrier access to the Missouri-based Kansas City Southern’s sprawling Midwestern rail network connecting farms in Kansas to ports along the Gulf of Mexico. It would also give it reach to Mexico, which made up almost half of Kansas City Southern’s revenue last year, and create the only network that cuts through all three North American countries. While Canadian Pacific said in a statement it expected board approval for the $23 billion deal sometime in 2022, it’s a process that could take years instead of months.

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