But would the merger help the supply chain? To put it simply, no. In due time, following a merger, rail routes are often canceled, and the availability of shipping options decreases.
In their defense, Canadian Pacific and Kansas City Southern say that this merger will be different than those of the past because their systems have minimal overlap, so integrating them will be simpler. This claim doesn't hold water because these types of"end-to-end" mergers still allow railroads a variety of options to limit competition – denying service to competitors, canceling reciprocal switching agreements, or simply closing critical gateways.
A decrease in Class I railroads in the United States comes at the benefit of railroad companies, and rail companies alone. If successfully merged, Canadian Pacific would have the power to discontinue less profitable routes. Fewer routes – with the ability to increase prices due to limited competition – mean a larger bottom line for the corporations, but there are few, if any, benefits to the public, the economy or the supply chain.
A decrease in competition means that farmers pay more to ship their produce, and consumers pay more at the grocery store. Worse yet, this consolidation will allow Canada to own the only route connecting all North American nations, stretching from Canada to Mexico. This is concerning for U.S. shippers, which could potentially lose the