T: Union Pacific and Canadian Pacific spar over KCS merger

TRAINS reports:

Union Pacific has urged federal regulators to reject the Canadian Pacific-Kansas City Southern merger application, arguing that it doesn’t contain enough market or operational data to meet requirements.

UP, in a filing with the Surface Transportation Board late Friday, said CP took shortcuts in its rush to file the application after its four-month battle with Canadian National to become KCS’s merger partner.

As a result, UP says CP and KCS improperly left 360,000 carloads — or roughly a third of potentially divertable traffic — out of their market analysis, which in turn contributed to a flawed operating plan for the combined railroad. UP also said the application is thin on data covering cross-border traffic through the Laredo, Texas, gateway, as well as the impact of traffic changes on Amtrak and Metra service in the Chicago area and freight service on shared trackage in St. Paul, Minn., and Houston.

The operational plan is “superficial,” UP says, and boasts that CPKC will help alleviate congestion in Chicago. “However, the Operating Plan shows the proposed transaction will actually increase the amount of rail traffic moving through Chicago,” UP wrote. “Indeed, some of the traffic Applicants plan to move through Chicago would be [the] result from diversions of traffic that Union Pacific currently interchanges with eastern railroads outside Chicago.”

UP argues that the STB must reject the application as incomplete and order CP and KCS to refile more detailed paperwork that also includes a service assurance plan.

Canadian Pacific, in a filing today, says its 4,342-page merger application is complete and that UP is merely trying to “delay the injection of new competition that UP will face if the transaction is approved.” CPKC will divert more traffic from UP than any other railroad, according to its merger application…

The full story can be read here.