16.01.2016, 18:44
Status Quo Is Not Option for North American Rail Industry
OREANDA-NEWS. Canadian Pacific (TSX: CP) (NYSE: CP) today released a white paper stating that a change in the railroad industry status quo is necessary to support continued growth in the North American economy.
Continued growth in the U.S. economy is dependent on North American rail service meeting current and future demand. In order to meet that demand, the railroads must add capacity. The question of how to create additional capacity to accommodate growth is a critical one. Adding infrastructure and building more track has become increasingly difficult, if not impossible.
Additionally, the demands of the common carrier obligation must be taken into consideration. Specifically, all Class 1 carriers must transport goods tendered to the railroad, no matter how dangerous. This comes into direct conflict with staunch resistance from communities of all sizes to add infrastructure in the form of new tracks and terminals. The prospect of increased traffic is also ?unpalatable in many instances, even if it improves the overall efficiency of the broader transportation network.
The solution lies in adding capacity without adding infrastructure, increasing the efficiency of the overall network and addressing critical issues, such as congestion in Chicago.
Canadian Pacific (CP) believes that industry consolidation offers the best opportunity to improve efficiency of the existing network and creates much needed incremental capacity without adding infrastructure, all while improving service for shippers.
CP is pursuing a combination with Norfolk Southern Corp. (NS) that it believes will:
* Enable far better utilization of existing infrastructure.
* Introduce alternative options for re-routing traffic around areas of congestion.
* Create new opportunities to generate the most efficient route for rail shipments.
* Allow CP-NS to provide end-to-end service to customers, without hand-offs and interchanges, which improves safety.
* Improve overall service for shippers of all sizes across the network.
The status quo is not an option for North American rail. Change is necessary to support continued economic growth, and that change needs to happen now.
Continued growth in the U.S. economy is dependent on North American rail service meeting current and future demand. In order to meet that demand, the railroads must add capacity. The question of how to create additional capacity to accommodate growth is a critical one. Adding infrastructure and building more track has become increasingly difficult, if not impossible.
Additionally, the demands of the common carrier obligation must be taken into consideration. Specifically, all Class 1 carriers must transport goods tendered to the railroad, no matter how dangerous. This comes into direct conflict with staunch resistance from communities of all sizes to add infrastructure in the form of new tracks and terminals. The prospect of increased traffic is also ?unpalatable in many instances, even if it improves the overall efficiency of the broader transportation network.
The solution lies in adding capacity without adding infrastructure, increasing the efficiency of the overall network and addressing critical issues, such as congestion in Chicago.
Canadian Pacific (CP) believes that industry consolidation offers the best opportunity to improve efficiency of the existing network and creates much needed incremental capacity without adding infrastructure, all while improving service for shippers.
CP is pursuing a combination with Norfolk Southern Corp. (NS) that it believes will:
* Enable far better utilization of existing infrastructure.
* Introduce alternative options for re-routing traffic around areas of congestion.
* Create new opportunities to generate the most efficient route for rail shipments.
* Allow CP-NS to provide end-to-end service to customers, without hand-offs and interchanges, which improves safety.
* Improve overall service for shippers of all sizes across the network.
The status quo is not an option for North American rail. Change is necessary to support continued economic growth, and that change needs to happen now.
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