UP - CSX Merger Speculation

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David Lang
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UP - CSX Merger Speculation

Unread post by David Lang »

https://www.railwayage.com/freight/up-more-like-csx/

https://static1.squarespace.com/static/ ... to+PSR.pdf

Only speculation at this point, but interesting.

Only time will tell of course.

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Talk
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Re: UP - CSX Merger Speculation

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I do not think that the government would allow UP and CSX to merge. That would be a huge monopoly.

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Re: UP - CSX Merger Speculation

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UP - CSX would likely result in BNSF - NS, according to one of the articles, along with what has been said in the past. Regardless of whether CN and CP would also join in, which would be likely I believe, you still would have 2 large railroad systems, thus promoting competition. This is my thinking anyway.

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Re: UP - CSX Merger Speculation

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David Lang wrote:
Fri Oct 16, 2020 1:38 pm
UP - CSX would likely result in BNSF - NS, according to one of the articles, along with what has been said in the past. Regardless of whether CN and CP would also join in, which would be likely I believe, you still would have 2 large railroad systems, thus promoting competition. This is my thinking anyway.
I feel like that is true, I would doubt it. I couldn't imagine this government allowing it

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Re: UP - CSX Merger Speculation

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Penn Central all over again

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Re: UP - CSX Merger Speculation

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Time will for sure tell. Here is my line of thinking. West of Chicago you basically have BNSF and UP, with a few smaller ones such as KCS, maybe Iowa Interstate, etc. Mergers wouldn't change that, you still have 2 railroads west of Chicago, but now (if it happens) they are bigger. The same is true for East and South of Chicago. Currently you have NS and CSX, post merger you still have NS and CSX, only then they will be bigger, so to me, competition remains the same. Adding in CN and CP, my reasoning would still be the same. Now I don't have a degree in Finance, but it seems that railroad customers "could" benefit from one last round of mergers because 2 large railroads would create greater efficiencies, i.e. shipping product from coast to coast, current using 2 railroads, future using only 1. Those efficiencies, in the form of actual cost to ship product, "could" be passed down to railroad customers in a very competitive environment. This is my attempt to be logical, but again I may need to be schooled. Someone please correct me if my line of thinking is wrong as I would like to learn other perspectives.

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Re: UP - CSX Merger Speculation

Unread post by Saturnalia »

A round of east-west mergers would maintain the existing regional duopoly, while increasing cross traffic between east and west. Right now, the railroads don't want to shorthaul themselves. This prevents potential intermodal lanes in particular, like KC-DET, which might open up if it were one railroad ownership.

As end-to-end mergers go, there wouldn't actually be that much consolidation. And the STB's rules say that the merging parties would have to prove that service would get better, not just stay the same.

Time will tell but it'll always be a possibility until the day it happens.
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Re: UP - CSX Merger Speculation

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I don't think the Canadian Gov't would allow CN and CP to merge as then they would have a monopoly over almost all of Canada. There are more mergers that could happen in the US because there are more available class 1's that could merge.

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Re: UP - CSX Merger Speculation

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I'm surprised KCS has held out this long
MrAnderson wrote:
Fri Oct 16, 2020 4:03 pm
There are more mergers that could happen in the US because there are more available class 1's that could merge.
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Re: UP - CSX Merger Speculation

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AARR wrote:
Fri Oct 16, 2020 4:04 pm
I'm surprised KCS has held out this long
MrAnderson wrote:
Fri Oct 16, 2020 4:03 pm
There are more mergers that could happen in the US because there are more available class 1's that could merge.
Especially with their trackage in Mexico. I bet NS would love to get in on that since they serve so many auto plants in the Detroit area.

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Re: UP - CSX Merger Speculation

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The pressure for an east west merger will come, it's only a matter of time. The regulatory reaction will vary depending on the make up of the legislature. But if Wall Street wants them merged the economic pressure will eventually overpower the regulators.

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Re: UP - CSX Merger Speculation

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PatAzo wrote:
Sat Oct 17, 2020 12:08 pm
The pressure for an east west merger will come, it's only a matter of time. The regulatory reaction will vary depending on the make up of the legislature. But if Wall Street wants them merged the economic pressure will eventually overpower the regulators.
Agree. It's only a matter of time until there is a east coast carrier -west coast carrier railroad merger. The most likely scenario is that after the first merger the other two (ish) parties remaining will also then merge to stay alive and competitive. Probably within a few months or possibly years. There will then be two large competing class I's with coast to coast networks.
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Re: UP - CSX Merger Speculation

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https://www.cnbc.com/2020/10/26/jim-cra ... thern.html


“As the precision railroading story winds down, they need to give you a new catalyst,” the “Mad Money” host said.

"...reviewing earnings reports from the railroad companies that have reported thus far, suggested that the rail industry could benefit from consolidation."

The Wall Street merger chatter....

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Re: UP - CSX Merger Speculation

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Talk wrote:
Fri Oct 16, 2020 1:27 pm
I do not think that the government would allow UP and CSX to merge. That would be a huge monopoly.
Ahhh....no it wouldn't be, as there are 2 more class 1"s, which, if they also merged, would create a DUOPOLY, not a monopoly. There would still be competition, as the 2 (sets of) mergers (BNSF+NS/UP+CSX) would be end-to-end, not parallel, as most are done to create efficiencies in order to cut costs. This would create 2 transcons, both of which would serve customers from coast to coast. After that, mergers would be limited in scope, due to not wanting to create a monopoly out of the 2 transcons...

Also, the articles shown in the first post are from fall, 2018....2 yrs old.....a bit on the stale side, I'd say.

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