When will the next round of mergers with Class I RR's take place? Possible combinations??

Question

Will the Canadian Pacific be bought by the Union Pacific or will they strike out own their own and buy the Iowa, Chicago and Eastern and the Kansas City Southern?

Answer 1

I don't see any merger between the IC&E and the KCS. The ICE is a friendly connection to the KCS so they can get Chicago traffic without owning the track or paying the crews. I think the spin off of secondary lines to non union operators is more likely. I would expect the KCS former Gateway Western/CMNW/ICG/GM&O/Alton line to be spun off to Watco sometime in the next couple of years. However, I think the class ones are set for a while. This will be esp true if a Democrat is elected in 2008.

Answer 2

A similar question came up here a couple of weeks ago.

I think another merger between two rail giants unlikely.

With the merger of the UP / SP and the creation of the BNSF, both of which got tacit approval, the post merger scene still left four giants and two other major players. This of course doesn't even hint at monopoly.

But, with a subsequent merger between any of the remaining major lines, if approved, would open the door for two or more remaining lines to seek merger approval to remain "competitive." This would leave only three major carriers in the US.

This does seem monopolistic. For this reason, I think further consolidation of anything more than the absorption of lesser lines into major networks unlikely, though not impossible.

Answer 3

Well, the answer to that question is quite tough to say the least. Trains Magazine did a piece on this a year or so ago and it included a number of different scenarios of possible partners. To be honest, from reading that Trains article and speaking with and hearing a number of folks very familiar and close to the industry discuss possible partners, it's completely wide open as to who will partner with who and when. From a railfan perspective I could give you an opinion of who I would like to see partner with who, but it's not worth much more than simply that, an opinion. ;o)

Having said that, I will say that whatever happens, there is a good bet that, as has happened for well over 100 years now, the Union Pacific name will still be standing when the dust clears after the next round unfolds.

Answer 4

Sounds like the UP will try to get the KCS. For a while we joked that the BNSF would buy the Norfolk Southern so they wouldn't have to repaint their whole engines again.......BnsF.

Answer 5

I think US railroads wont merge for a while. But a north -south merge between Mexico, USA and Canada makes a very interesting combination.