Railroad News

Rail News Home Kansas City Southern 12/3/2021 Rail News: Kansas City Southern
The Class I receives and originates shipments of grain and grain products for deliveries in the United States and Mexico. Photo – KCS

Rail News Home Kansas City Southern 12/1/2021 Rail News: Kansas City Southern
For the second straight year, the Class I canceled its Holiday Express due to the pandemic. Photo – KCS

Rail News Home Kansas City Southern 11/1/2021 Rail News: Kansas City Southern
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.

Rail News Home Kansas City Southern 10/26/2021 Rail News: Kansas City Southern
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."

Rail News Home Kansas City Southern 10/19/2021 Rail News: Kansas City Southern
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.

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

Rail News Home Kansas City Southern 10/11/2021 Rail News: Kansas City Southern
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.

Rail News Home Kansas City Southern 9/13/2021 Rail News: Kansas City Southern
Kansas City Southern yesterday announced that its board determined that Canadian Pacific's revised proposal constitutes a “company superior proposal” as defined in KCS’s merger agreement with CN.Under the terms of CP's proposal, each share of KCS common stock would be exchanged for 2.884 CP common shares and $90 in cash. In addition, holders of KCS preferred stock would receive $37.50 in cash for each share of KCS preferred stock held, according to a KCS press release.The proposal is binding on CP and may be accepted by KCS at any time prior to 5 p.m. EDT on Sept. 20. The transaction would be subject to approval by the stockholders of CP and KCS, receipt of regulatory approvals and other customary closing conditions.KCS has notified CN that it intends to terminate its merger agreement and enter into the definitive agreement with CP, subject to CN’s right to negotiate amendments to the merger agreement for at least five business days and the KCS board's further determination as to whether any such amendments would change the superior proposal designation.CP stands ready to execute a definitive merger agreement to create the first U.S.-Mexico-Canada railway to enhance competition in the North American rail network, CP officials said in a press release.

"We are pleased to reach this important milestone and again pursue this once-in-a-lifetime partnership," said Keith Creel, CP's president and chief executive officer. "As we have said throughout this process, CP remains committed to everything this opportunity presents. This merger proposal provides KCS stockholders greater regulatory and value certainty. We are excited to move forward as we work toward making this perfect match a reality."

Rail News Home Kansas City Southern 9/12/2021 Rail News: Kansas City Southern
Kansas City Southern today announced that its board has determined that Canadian Pacific's revised proposal constitutes a “company superior proposal” as defined in KCS’s merger agreement with CN.The KCS board made this determination after consultation with the company's outside legal and financial advisers, according to a KCS press release.Under the terms of CP's proposal, each share of KCS common stock would be exchanged for 2.884 CP common shares and $90 in cash. In addition, holders of KCS preferred stock would receive $37.50 in cash for each share of KCS preferred stock held.The proposal is binding on CP and may be accepted by KCS at any time prior to 5 p.m. EDT on Sept. 20. The transaction would be subject to approval by the stockholders of CP and KCS, receipt of regulatory approvals and other customary closing conditions.KCS has notified CN that it intends to terminate KCS's merger agreement with CN and enter into the definitive agreement with CP, subject to CN’s right to negotiate amendments to the merger agreement for at least five business days and the KCS board's further determination as to whether any such amendments would cause the CP proposal no longer to constitute a company superior proposal.CP stands ready to execute a definitive merger agreement to create the first U.S.-Mexico-Canada railway to enhance competition in the North American rail network, CP officials said today in a press release."We are pleased to reach this important milestone and again pursue this once-in-a-lifetime partnership," said Keith Creel, CP president and chief executive officer. "As we have said throughout this process, CP remains committed to everything this opportunity presents. This merger proposal provides KCS stockholders greater regulatory and value certainty. We are excited to move forward as we work toward making this perfect match a reality."

Rail News Home Kansas City Southern 9/4/2021 Rail News: Kansas City Southern
Kansas City Southern today announced that its board has unanimously determined that the unsolicited proposal received from Canadian Pacific on Aug. 31 to acquire KCS in a cash and stock transaction valued by CP at $300 per KCS share could reasonably be expected to lead to a “company superior proposal” as defined in KCS’s merger agreement with CN.KCS intends to provide CP with nonpublic information and to engage in discussions and negotiations with CP with respect to CP’s proposal, subject in each case to the requirements of the CN merger agreement, KCS officials said in a press release.KCS remains bound by the terms of the CN merger agreement, and KCS's board has not determined that CP's proposal in fact constitutes a company superior proposal. In addition, KCS notes that there can be no assurance that the discussions with CP will result in a transaction, the press release stated.As previously announced on May 21, KCS entered into a merger agreement with CN, pursuant to which CN agreed to acquire KCS in a stock and cash transaction valued at $325 per KCS share based on the CN and KCS closing prices on May 12.

Rail News Home Kansas City Southern 9/3/2021 Rail News: Kansas City Southern
Kansas City Southern has rescheduled until Sept. 24 a special meeting of stockholders to vote on the CN merger agreement and other proposals.KCS adjourned the special meeting that had been scheduled for today.All stockholders of record of KCS common stock and KCS 4% non-cumulative preferred stock as of the close of business on July 1, 2021, remain entitled to vote their shares at the special meeting, KCS officials said in a press release.As previously disclosed, KCS is working to evaluate its options and the KCS Board of Directors will continue to make decisions based on the best interests of the company and its stockholders, they said.Earlier this week, after the Surface Transportation Board rejected the use of a voting trust in the proposed CN-KCS merger, KCS confirmed that it received an unsolicited proposal from Canadian Pacific reaffirming CP’s interest in acquiring KCS.

Rail News Home Kansas City Southern 8/18/2021 Rail News: Kansas City Southern
Savage today announced a partnership with Kansas City Southern to construct a multicommodity railport with transload and rail-car storage capabilities in Mossville, Louisiana.Savage will own and operate the railport, which will be built on property leased from KCS at its Mossville rail yard. Savage's Mossville facility is expected to be operational by January 2022 and will provide a link in the supply chains of Lake Charles area refineries, chemical plants and other businesses, Savage and KCS officials said in a press release.Savage has a longstanding relationship with KCS."We've provided rail and loading services for customers in the Lake Charles area for many years, and look forward to making a difference for even more businesses in southwest Louisiana," said Savage President and Chief Executive Officer Kirk Aubry.The Mossville railport is part of the growing Savage transload network of about 50 multicommodity, rail-connected terminals across North America, and the first developed in partnership with KCS.When completed, the railport will include more than 70 transloading spots —expanded from 40 existing spots — for moving chemicals, refinery products and other materials between trucks and rail cars. It will also feature 600 spots for rail-car storage.The railport will provide access to moving products into Mexico on KCS rail lines."The Louisiana railport will provide additional rail capacity and new services for shippers in the Mossville and Lake Charles region, which will expand their supply chain choices and allow for more competitive shipping options," said KCS President and CEO Pat Ottensmeyer.