Canadian Pacific (CP) and Kansas City Southern (KCS) have officially combined to create CPKC - CPKC, becoming the first and only single-line railway connecting Canada, the U.S. and Mexico.

The combination comes as authorized by the U.S. Surface Transportation Board’s (STB) March 15, 2023, final decision.

 Source: CPKCS

"Today, we celebrate this historic combination creating a truly unique single-line rail network that begins a new chapter of railroad history in North America," said Keith Creel, CPKC president and chief executive officer, in a statement.

"As we mark this once-in-a-lifetime occasion by driving the Final Spike in Kansas City, Missouri, where CP and KCS come together, we stand ready to bring new competition into the North American rail industry at a time when our supply chains have never needed it more."

Creel noted that the unmatched CPKC network will give customers new options and expanded reach to more markets.

"The public, environmental, competitive and safety benefits of this historic combination are extraordinary for our railroaders, communities, rail customers and the North American economy," he added.

US$31B acquisition of KCS

CP completed its US$31 billion acquisition of KCS on December 14, 2021.

Immediately upon the closing of that acquisition, shares of KCS were placed into a voting trust, which ensured that KCS operated independently of CP during the regulatory review process.

CP said today (April 14), pursuant to the STB’s March 15, 2023, final decision approving the transaction, the voting trustee transferred the KCS shares to an affiliate of CP, formally bringing KCS into CPKC.

"We stand ready to move the commerce of today and ready to compete hard to grow tomorrow," Creel said. "With the most relevant railroad network on the continent, we'll create value for all stakeholders, bringing new jobs, economic growth and environmental benefits to workers, customers and communities."

With its global headquarters in Calgary, Alta., Canada, CPKC is the only railway connecting North America and has unrivalled port access on coasts around the continent, from Vancouver to Atlantic Canada to the Gulf of Mexico toLázaro Cárdenas on Mexico's Pacific coast.

While remaining the smallest of six U.S. Class 1 railroad by revenue, the new combined company has a much larger and more competitive network, operating approximately 20,000 miles of rail, and employing close to 20,000 people.

Full CP-KCS combination in three years

Full integration of CP and KCS is expected to take place over the next three years, unlocking the benefits of the combination.

The announcement noted that CPKC plans capital investments in the new infrastructure of more than US$275 million over the next three years to improve rail safety and the capacity of the core north-south CPKC main line between the U.S. Upper Midwest and Louisiana.  

Anticipated environmental benefits of CPKC include the avoidance of more than 1.6 million tons of greenhouse gas (GHG) emissions due to the anticipated improved operational efficiency of CPKC versus current operations and another 300,000 tons of GHG emissions with the diversion of 64,000 trucks to rail for a total reduction of 1.9 million tons of GHG emissions over the next five years.

Diverting 64,000 long-haul truck shipments to rail annually with new CPKC intermodal services will reduce total truck vehicle miles travelled by almost 2 billion miles over the next two decades, saving US$750 million in highway maintenance costs. 

Meanwhile, the joint statement said CPKC filed articles of amendment changing the company's name to "Canadian Pacific Kansas City Limited", which became effective today.