Railroad News

CP, KCS file merger application with STB

Rail News Home Kansas City Southern 11/1/2021 Rail News: Kansas City Southern
image Canadian Pacific and Kansas City Southern have jointly filed a railroad control application with the Surface Transportation Board (STB) regarding their proposed merger, which would create the only single-line railroad linking the United States, Mexico and Canada. The new railroad would be called Canadian Pacific Kansas City (CPKC). The control application provides an overview of the proposed operational integration of the CP and KCS rail networks, the impact of that consolidation on the companies’ finances and labor needs, and the anticipated competitive and other benefits, CP and KCS officials said Oct. 29 in a press release. Information in the filing outlines the public and customer benefits a CP-KCS combination would bring, including more efficient north-south trade arteries to support the interconnected supply chains of the United States, Mexico and Canada, they said. The joint control application reiterates the applicants’ commitment to keep all existing freight rail gateways open on commercially reasonable terms, including the Laredo gateway between the United States and Mexico, they said. It also shows how customers will not lose competitive routings because no new regulatory “bottlenecks” are being created, they said. It also describes how the combined company will compete aggressively to attract traffic to its network via new single-line lanes between Canada, the Upper Midwest and the Gulf Coast, Texas and Mexico. CP has agreed to acquire KCS in a stock and cash transaction for about $31 billion, which includes the assumption of $3.8 billion of outstanding KCS debt. The proposal values KCS at $300 per share.

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KCS to serve new auto distribution center in Mexico

Rail News Home Kansas City Southern 10/26/2021 Rail News: Kansas City Southern
image Kansas City Southern today announced a collaboration with Suministro Industriales Potosinos SA de CV (SIPSA) and TransDevelopment Group (TDG) to develop the Central Bajio Vehicle Distribution Center in Mexico, an origin and destination terminal for the shipment of finished vehicles. Strategically located on a KCS mainline and developed, owned and operated by SIPSA and TDG, the VDC will serve the rapidly-growing Bajio region and strong Mexico City area demand, KCS officials said in a press release. The Central Bajio VDC will have a capacity for up to 10,000 vehicles, unit train service and direct truck access to Mexico City, Guadalajara and the Bajio region. The terminal is located about 25 miles west of Queretaro, Mexico’s fastest growing city, along the KCS mainline between Monterrey and Lazaro Cardenas. It will be constructed adjacent to SIPSA’s Transload and Cross Dock Terminal — the highest-capacity terminal of its kind on the KCS network. The surrounding area is the largest center of automobile manufacturing in Mexico. "Development of the Central Bajio VDC adds velocity, capacity and markets,” said Rodrigo Flores, KCS vice president of automotive and intermodal. “One goal is to speed the turnaround for multilevel rail cars making a round-trip between the U.S. and Mexico improving the availability of rail cars in the region. Unloading rail cars in the Bajio, near many of the assembly plants where empty rail cars are needed, adds capacity and reduces congestion."

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KCS posts Q3 revenue increase despite traffic disruptions

Rail News Home Kansas City Southern 10/19/2021 Rail News: Kansas City Southern
image Kansas City Southern today reported third-quarter revenue of $744 million, a 13% year-over-year increase that resulted from mix, higher fuel surcharges and the strengthening of the Mexican peso against the U.S. dollar. Third-quarter operating expenses totaled $492.1 million, including $36.5 million in merger costs. Operating income was $251.9 million and the reported operating ratio was 66.1%. Net income was $156.5 million, or $1.71 per diluted share. When adjusted for merger costs and other factors, KCS posted operating income of $288.4 million, net income of $185 million and diluted EPS of $2.02. The adjusted operating ratio was 61.2%. Overall, third-quarter carload volumes fell 3% compared to the prior year primarily due to the following commercial impacts:
• auto plant shutdowns driven by a global microchip shortage;
• service interruptions at Lazaro Cardenas due to Kansas City Southern de Mexico right-of-way blockages resulting from teachers' protests; and
• increased regulation of refined fuel product shipments into Mexico resulting in supply chain disruptions. "We are encouraged that despite several commercial headwinds, our network is performing extremely well and we are delivering near record velocity and dwell,” said President and Chief Executive Officer Patrick Ottensmeyer in a press release. "Underlying industrial demand is strong, and KCS has maintained resources to prioritize customer service as volumes return to the network." As certain supply chain disruptions are resolved and the revenue environment improves, the Class I's network will be well-positioned to handle incremental volume while continuing to provide premium service to customers, he added.

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KCS announces EVP Sameh Fahmy will leave company

Rail News Home Kansas City Southern 10/14/2021 Rail News: Kansas City Southern
image Sameh Fahmy Photo – kcsouthern.com

Kansas City Southern yesterday announced that Sameh Fahmy, executive vice president of precision scheduled railroading, will leave the company by the end of the year. 

During his tenure at the railroad, which began in January 2019, Fahmy led the company through its transformational implementation of precision scheduled railroading (PSR), KCS officials said in a news release.

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KCS enlists Commtrex to boost supply-chain efficiency

Rail News Home Kansas City Southern 10/11/2021 Rail News: Kansas City Southern
image Kansas City Southern announced today that it has engaged Commtrex to enhance the visibility and connectivity of its network of more than 100 transload facilities in the United States and Mexico using Commtrex's platform. The new relationship with Commtrex comes at a time of increasingly complex and volatile global supply chains, capacity constraints, labor shortages, rising transportation costs and growing trade throughout North America due to the United States-Mexico-Canada Agreement, KCS officials said in a press release. Located in 19 U.S. and Mexican states, KCS' transload facilities handle food and agricultural commodities, bulk materials, chemicals, paper and forest products, steel and other metals. The Commtrex platform enables shippers to search for transload centers by location, commodities handled, services provided and other parameters to develop their freight-rail options. Close to one-third of Commtrex’s 2,300 members are rail-served shippers.

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