Canadian Pacific Railway Ltd will be undergoing some rebranding according to Surface Transportation Board’s (STB) stamp of approval.
The United States regulator issued a decision approving CP and KCSs joint merger application, combining both companies to form Canadian Pacific Kansas City (CPKC).
This will be the first single-line railway connecting Canada, the United States and Mexico.
In the future, CP will exercise control of KCS as early as April 14 this year. There is still lots of work to be done; specifically, CP is left reviewing a 212-page document in detail, after which it will release more news about CPKC.
CP President and Chief Executive Officer Keith Creel had positive things to say about the approval.
“These benefits are unparalleled for our employees, rail customers, communities and the North American economy at a time when the supply chains of these three great nations have never needed it more,” Creel added.
To date, CP is known to be the safest railroad in North America according to the Federal Railroad Administration train accident frequency ratio, holding that title for 17 straight years.
“A combined CPKC will connect North America through a unique rail network able to enhance competition, provide improved reliable rail service, take trucks off public roads and improve rail safety by expanding CP’s industry-leading safety practices,” concluded Creel.
STB has reached the conclusion that are many benefits to this combination.
“This new single-line service will foster the growth of rail traffic, shifting [around] 64,000 truckloads annually from North America’s roads to rail, [while supporting] investment in infrastructure, service quality, and safety,” said the board.
Headquartered in Calgary, Alberta, CPKC is still the smaller of six American Class 1 railroads when looking at overall revenue.
CPKC will have around 20,000 miles of rail with around 20,000 employees.
A full merger of the two will span over the next three years with many moving parts.
Canadian Pacific Railway is up over 5.50 per cent, trading at C$105.45 at 2:13 EDT.