By Adriano Marchese
Canadian Pacific Kansas City won't be participating in any railroad consolidation for the time being, a move which it says could bring on more risk across the sector and beyond.
The Canadian railroad said Tuesday that it doesn't believe any further rail consolidation is necessary for the industry as it currently stands, but that there are more benefits and unique value-creating opportunities to be created in the three-nation network.
As it currently stands, the system connects shippers in all parts of North America through an effective interline of service options, but that could be disrupted by mergers, putting customers, rail employees and the broader supply chain at risk.
In particular, those risks would be exacerbated by the inevitable follow-on consolidation, it said.
"We believe that a transcontinental merger would trigger permanent restructuring of the industry and result in a disproportionately large railway whose size and scope would require others to take action," said CPKC Chief Executive Keith Creel.
The industry has been in a buzz lately after a pact between CSX and BNSF Railway was announced that aims to connect the east and west coasts of the U.S. The news sparked a debate as to whether the two railroad operators are testing a merger or actually trying to avoid a full-on consolidation in the wake of a planned $71.5 billion deal to combine Union Pacific and Norfolk Southern, creating the first transcontinental railroad in U.S. history.
CPKC points to this pact, as well as previous rail network alliances by CPKC and CSX in the Southeast U.S., as offering opportunities for further cooperation between "willing" railways to improve service while preserving optionality for shippers.
CPKC said Tuesday that the public's interest is best served by the nation's railroads focused on delivering reliable, "truck-like" service while investing in their networks to increase U.S. rail network capacity required for sustainable growth, rather than more consolidation in an industry already greatly consolidated.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
August 26, 2025 09:18 ET (13:18 GMT)
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