25.March, Dover-Foxcroft ME – The recent Major Transaction filed with the STB for Canadian Pacific Railway to acquire Kansas City Southern is sure to have far-reaching effects on shippers across the CP System, however one of the first to speak up is what could be construed as an unlikely supporter. Pleasant River Lumber Co. has had some issues with CP early this year, regarding the surprise decommissioning of Pleasant River cars. Nonetheless, Stephen Banahan, Industrial Sales Manager of Pleasant River Lumber Co. Inc. has chimed in with a letter in support of the Transaction.
Pleasant River has a total of five Maine sawmills with CP rail service at two of them. Pleasant River ships approximately 325 cars per year and has hopes of increasing that to 500 cars in the future.
“Pleasant River Lumber supports approval of the CP/KCS combination. The transaction would provide significant benefits that we are eager to see realized as soon as possible. From our perspective, the transaction promises to provide improved service options and invigorate transportation competition in the markets we serve. The combined CPKC network – with new single-line hauls and access to premier ports on the U.S. Gulf, Atlantic and Pacific coasts as well as to key overseas markets – would help us reach our existing markets and new markets more efficiently. And, with the two railroads’ strong focus on safety and their track record of operational excellence, I have no doubt that CPKC will be able to integrate their operations seamlessly to the benefit of rail customers and other stakeholders.”
Pleasant River Lumber has not previously spoken in favor of railroad consolidation, but believes this merger will be beneficial to their business. The company notes that it ships approximately one third of its annual production by rail. It enables the company to ship to a much wider geographic customer base than shipping via flatbed trucks.
We are very excited about the transaction because it will allow a combined CPKC to provide new, more efficient, and reliable rail service options. This will strengthen competition against the other, larger rail carriers and trucks that serve our markets.
Citing Pleasant River specifics:
- CPKC’s new single-line haul offerings will expand market reach and offer new competitive transportation options for shipments of lumber from Maine to various destinations in the Midwest and South.
- We are particularly enthusiastic about the role new CPKC single-line routes will play in expanding access to growing markets across the United States, Mexico, and Canada under the USMCA trade agreement. It is important that there be a true USMCA railroad option.
- CPKC’s new service offerings will improve transit times and reliability, which will reduce our equipment costs and improve our efficiency.
“KCS and CP have had a cooperative relationship in the past, and CP-KCS joint routes are among our transportation options, but as separate companies they have not been able to offer the kind of seamless, single-line service we have come to expect from our transportation providers. This transaction will improve our transportation options.
“At the same time, the entirely complementary nature of CP’s and KCS’ networks – connecting only at Kansas City and not overlapping anywhere – means that the transaction will not have any adverse effects on competition. It will only make these carriers a better alternative relative to the other options that already exist, since CPKC will continue to interchange with all their other existing interline partners.
“Given the straightforward network connectivity between CP and KCS, and the fact that CP and KCS are the two smallest U.S. Class I railroads, we are confident that they will be able to implement their transaction without the service disruptions that have accompanied some past rail mergers.
“For these reasons, Pleasant River Lumber is voicing strong support for the combination of CP and KCS, because it will enhance competition, provide expanded options, and drive efficiencies for customers of all sizes. Pleasant River urges the STB to approve CP’s acquisition of KCS as swiftly as possible so that these systems can be integrated, and the end-to-end benefits of this deal can be realized for the benefit of all stakeholders.”