The upcoming railroad merger between Kansas City Southern and one of two competitors is starting to receive more attention as various groups begin to recognize the importance of having a competitive rail system in Louisiana.
Many of Louisiana’s most important industries — ports, oil and gas, agriculture and others — rely on freight rail to transport their products across the country. Having competitive options is a critical component in the price, not only for producers, but consumers as well. In fact, the final prices of virtually all consumer purchases are, to some degree, dependent on transportation costs.
A merger between KCS and Canadian Pacific would open up new markets to Louisiana businesses by creating the first single-line rail network linking the U.S., Mexico and Canada. As our economy becomes more and more global in nature, the most successful businesses will be those taking best advantage of the opportunities in both Mexico and Canada. Louisiana businesses have always been aware of, and competitive in, these neighboring markets. The most recent numbers show that our businesses sold nearly $13 billion in exports to Canada and Mexico.
Louisiana businesses, and the state’s business leadership, should strongly consider a CP-KCS merger. The other competitor, Canadian National, has made an unsolicited offer to purchase KCS, but that would combine two competitive lines to just one line in a critical part of Louisiana’s transportation infrastructure. As I stated earlier, producers and consumers both need competitive options, and unlike a CN-KCS merger, competition will thrive with a third-party merger offered by CP.
Louisiana businesses need a rail line that is dependable and gets their products to market quickly and at a low cost to them. The CN-KCS deal is not the best offer for Louisiana and will lead to increased prices and less competition.
Attorney, Baton Rouge