Washington District of Columbia USA - Canadian National has asked federal regulators to condition the approval of the CPKC merger on the granting of trackage rights over the KCS line linking Springfield, Illinois, with Kansas City and St. Louis.
 
CN has sought to own the Springfield Line outright, arguing that the Surface Transportation Board (STB) should order CP and KCS to divest the route.
 
But in a final brief filed with regulators on 21 Oct 2022 CN says it would be willing to accept trackage rights on the Springfield Line, which it would upgrade and connect with its former Illinois Central to create a new single-line route connecting Kansas City with Chicago, Detroit, and Eastern Canada.
 

Routing map - Date? Cartographer?

CN says it would be able to divert 80,000 trucks per year to intermodal service over the line once $250 million is spent on improvements.
 
"Divestiture of the Line to CN is the best remedy to address CP's anti-competitive acquisition of the parallel Springfield Line. But at the public hearing, the Board asked CN if it would consider trackage rights as an alternative remedy," CN wrote in its fling.
 
"After careful consideration, CN believes that, while not optimal, the type of trackage rights remedy raised by the Board could sufficiently preserve the Springfield Line as a viable competitive alternative, but only if those rights are accompanied by provisions that would protect CN's investment and impose service commitments."
 
As part of the Conrail carve-up in 1999, the STB granted CP trackage rights down the east side of the Hudson River from the Albany, N.Y., area to New York City.
 
CN says its request in the CPKC merger is similar and would unlock the Springfield Line's potential.
 
CN contends that because CP and KCS don't plan to invest in the Springfield Line it would be relegated to "branch line status," which it says is anti-competitive and therefore requires a remedy in the form of divestiture or trackage rights.
 
CN also argues that regulators have imposed conditions for losses of potential competition between railroads, citing build-out conditions imposed on the CN-IC, Union Pacific-Southern Pacific, and CN-Duluth, Missabe & Iron Range mergers.
 
In addition to the trackage rights, CN seeks the right to invest in the Springfield Line and terminals, along with "safeguards to ensure adequate maintenance, efficient service, and non-discriminatory dispatching."
 
Additional trackage rights through Kansas City and an ownership interest in the Kansas City Terminal would be required to link the Springfield Line with the KCS International Freight Gateway intermodal terminal, CN says.
 
CN also says its control of the Springfield Line would allow traffic to bypass Chicago and reduce the impact of CPKC merger-related traffic increases in Chicago's western suburbs.
 
CP and KCS have called the request for divestiture of the Springfield Line a dramatic overreach that would harm competition, as well as shippers on the route who currently enjoy single-line service to Mexico.
 
There's no regulatory basis for the STB to award CN the line, the railways said.
 
CP and KCS doubted there were 80,000 trucks that could be diverted to CN service between Kansas City and Chicago or Detroit, noting that they would already be using intermodal service offered by Norfolk Southern, BNSF Railway, and Union Pacific.
 
In its final brief filed with the STB, CP said CN's requests amounted to sour grapes.
 
"CN's entire litigation strategy in this proceeding has been aimed at delay or dismemberment of the new CPKC network, which will match CN's single-line route to the Gulf (created by the CN/IC transaction) and compete directly against CN in many markets," CP wrote in its filing.
 
"CN's request for a Board order requiring a forced sale of KCS's lines east of Kansas City is only the most blatant of CN's efforts to achieve through Board action what it could not achieve in the marketplace. On the facts here, the Board lacks authority to grant the relief CN requests."
 
CP told the board that it would be willing to talk with CN regarding a joint venture involving investment and use of the Springfield Line to compete for truck traffic that's not currently moving over existing rail routes between Kansas City and Chicago.
 
Bill Stephens.