Rail Merger Will Serve Three Countries

Mar 26, 2021  | 1 min  | Ep4632

The signing of USMCA was touted as lifting all North American boats for those who both buy and sell goods.

This week, a proposed merger could connect the three trading partners in a major way.

Peter Tubbs reports.

This week, the Canadian Pacific railroad proposed a $25 billion merger with the Kansas City Southern railroad, which would complete a system of routes that would service all three members of the USMCA trade agreement.
The integrated railroad would simplify the movement of cargo from Canada to Mexico via reduced inspection and paperwork requirements. Trackage and facilities in the deal will create an “end-to-end” merger, as the two systems only intersect in Kansas City. For U.S. row crop producers, the new Canadian Pacific Kansas City Railroad will create a simplified route for Midwestern grain to reach ports along the Gulf Coast.
The new entity would be the fifth largest of the six U.S. Class 1 railroads while servicing around 20,000 miles of track. The two companies generated over $8 billion in revenues in 2020. 
The merger comes amid a recovery of supply chains thrown into disarray by the COVID-19 virus. Railroads, like so many parts of the economy, have been coping with shifting consumer purchasing habits which have caused a disruption in production and distribution systems.
For Market to Market, I’m Peter Tubbs.


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