CN Files Letter With Surface Transportation Board - Seite 3

Moreover, CN is committed to working with customers that are dual-served by CN and KCS to ensure that they would not become sole-served as a result of a CN-KCS transaction. CN and KCS have limited overlap—amounting to approximately 1% of their total network, and a very limited number of customers are served only by CN and KCS (so-called 2-to-1 customers). If KCS chooses to partner with CN, CN will propose effective solutions, working closely with these customers to ensure that no customer will become sole served as a result of the transaction.

Furthermore, CN would commit to keep all existing gateways between KCS and other rail carriers open on commercially reasonable terms, including the Kansas City gateway between KCS and CP.

Many of CP’s other alleged concerns fall apart upon quick examination. For example, CP complains that KCS and CN “both reach the Port of Mobile, Alabama” without noting that the Port is served by multiple other railroads, including Class Is. And CP’s partial quotation from CN-IC ignores the context and holding of that decision, which recognized that a CN-KCS marketing alliance did not raise concerns precisely because the Board recognized that their networks were complementary and largely not overlapping.

Finally, the Board should disregard CP’s suggestion that it would be compelled to pursue a merger with another Class I railroad if KCS chose to combine with CN. Over the past decade, it is CP that has made multiple attempts to merge with different Class I railroads. CP’s effort to acquire KCS is their latest such effort. If CP in the future finds a willing Class I partner, the current merger rules plainly would apply and provide the STB with the opportunity to ensure that any such transaction would be in the public interest.

CN’s confidence about its ability to prove that its transaction is pro-competitive is demonstrated by its willingness to comply with the current merger rules, including the requirement that applicants demonstrate enhanced competition. CP apparently is not. CP instead has resisted the application of those rules—despite comments from multiple leading shipper associations requesting that the new rules be applied. CP wants older, less demanding rules to apply to its merger, but if KCS chooses instead to pursue a combination with CN, then CP claims that greater scrutiny is required. The STB should instead provide a level playing field.