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Kansas City Southern (NYSE: KSU) sets date for vote on combination with CN (TSX:CNR)
Source: Kansas City Southern
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  • CN (CNR) and KCS (KSU) outline the benefits of a pro-competitive combination for shippers
  • The first step is delivering more choices to its rail customers
  • Secondly, CN and KCS look to keep gateways open on commercially reasonable terms
  • Lastly, the companies look to create greater price transparency. They are talking with the customers about a binding merger commitment
  • With more transparency, each carrier in a move will need to justify its price, escalation and service, which will foster greater rail-to-rail competition
  • CN (CNR) is up 0.68 per cent and is trading at C$132.97 at 10:42 am ET

CN (CNR) and Kansas City Southern (KSU) outlined how the proposed CN and KCS combination will benefit shippers.

The combination would promote competition, growth and provide more choice for rail customers, port operators, employees, stakeholders and communities.

As outlined in the joint filing to the Surface Transportation Board on July 6, 2021, CN and KCS will enhance competition by implementing various steps.

The first step is delivering more choices to its rail customers. The combination allows shippers the ability to connect with other Class I carriers up and down the combined network so that a shipper can use the most efficient and lowest cost gateway and routing options available for a particular move.

The combined network will provide unprecedented choice, resiliency and flexibility.

CN and KCS are committed to keeping CN and KCS major rail gateways open both physically and commercially.

Agricultural customers, including farmer-owned co-operatives, who benefit from existing competitive joint line routings through gateways with CN or KCS and another carrier, will continue to have those routings available upon completion of the merger.

Everyone benefits from this commitment. Customers will continue to enjoy the interline service they have today, along with new, and enhanced rail-to-rail competition that the combination would make possible. And by creating more optionality through major gateways, we will offer customers a new ability to shop for the best price and service combination.

CN and KCS will offer voluntary, confidential, binding arbitration to permit quick resolution of any commercial dispute over the gateway commitment with our customers.

Lastly, the companies look to create greater price transparency. They are discussing a binding merger commitment in which, upon request from a customer, a combined CN-KCS will offer a separate segment rate for the CN-KCS portion of a movement, in addition to a through rate for the entire movement.

This commitment to price transparency will enhance competition throughout the rail industry. With more transparency, each carrier in a move will need to justify its price, escalation and service, which will foster greater rail-to-rail competition.

CN is a world-class transportation leader and trade enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year.

Headquartered in Kansas City, Mo., Kansas City Southern (KCS) (NYSE: KSU) is a transportation holding company that has railroad investments in the U.S., Mexico and Panama.

CN (CNR) is up 0.68 per cent and is trading at C$132.97 at 10:42 am ET.

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