May 7, 2023 - TRA Newswire -
Union Pacific is not happy with the recent Surface Transportation Board decision that allowed the merger of Canadian Pacific (CP) and Kansas City Southern (KCS) into the new CPKC. UP has filed suit in federal court of appeals to review the STB decision over concerns about competition.
Union Pacific petitioned the Washington D.C. Circuit Federal Court of Appeals to vacate the merger order, saying that the STB exceeded its authority. UP said the rail regulator did not consider negative impacts such as reducing competition and negative impacts to shippers and other stakeholders. The two-page petition stated "Union Pacific seeks relief on the grounds that the agency action is in excess of the Board’s authority; that it is arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law; and that it is not supported by substantial evidence. Union Pacific requests that this Court vacate the order under review and grant such additional relief as may be necessary and appropriate.”
In a statement, CPKC responded that "the STB conducted a comprehensive, thorough and thoughful review of the combination (CP and KCS) which produced the right final decision clearly recognizing the many benefits."
Union Pacific would seem to be CPKC's biggest competitor for freight traffic between Midwestern states and Mexico, however UP, Canadian Pacific (CN), and Ferromex (FXE) recently announced a partnership called Falcon Premium intermodal service to funnel traffic between Canada, the U.S., and Mexico. This would match up CPKC with a combo UP/CN fighting for the same shippers in basically the same markets.
During STB merger hearings, UP had expressed concerns that the regulators did not impose conditions on CP and KCS to ensure that there would be fair competition when exchaging traffic. The CPKC merger resulted in the first transcontinental railroad serving Canada, the U.S. Midwest and Mexico with single-line service between all three countries.
Photo credit: Railway Age