Agricultural News
Former U.S. Sen. Byron Dorgan Says Proposed Rail Merger Will Improve Shipments of Ag Commodities
Fri, 21 May 2021 08:11:48 CDT
A proposed merger involving several major U.S. and Canadian rail lines could greatly impact agricultural shipments.
The merger initially involved Kansas City Southern and Canadian Pacific Railway but recently Canadian National Railway entered the mix.
Former U.S. Sen. Byron Dorgan (D-North Dakota), representing Canadian Pacific, was recently interviewed by Radio Oklahoma Ag Network Farm Director Ron Hays about the merger proposal.
I have long been an opponent of rail mergers, Dorgan said, noting they don't make a lot of sense.
However, Dorgan granted a rare exception to the proposed merger with Canadian Pacific and Kansas City Southern.
The reason I think it is a rare exception is because it will open new markets, promote more competition and create a single line opportunity to both coasts and down into Texas and Mexico, he said.
The original talks estimated the merger at $25 billion.
Dorgan said he expects the merger to pass the scrutiny of regulators.
I think it is likely to because I think it will provide more competition and opportunities for shippers to serve new markets, Dorgan said.
He argued that is not true for Canadian National which has 300 shipping facilities where they serve along with Kansas City Southern and that would destroy competition.
Dorgan admits it is confusing when you're talking about two Canadian companies involved but only one of them, Canadian Pacific, would provide new service with a single line that would connect premier ports on the Gulf and both coasts.
With the new U.S. Mexico Canada Trade Agreement, Dorgan argues this would make sense opening new markets with more competition and that would happen with Canadian Pacific and the merger with Kansas City Southern.
The proposed merger would create a transcontinental USMCA rail network.
The former U.S. Senator believes the Surface Transportation Board should not take a serious look at the Canadian National proposal.
If they do, Dorgan is concerned it would lead to more mergers.
Dorgan, who has long championed agriculture, noted grain producers in his home state of North Dakota support the merger of Canadian Pacific and KCS.
It would be a strong advantage, if the merger is with Canadian Pacific, for agriculture from Canada to Mexico, he said.
Some shippers are now faced with multiple rail lines choking the system and forcing the cargoes to be reloaded.
Eliminating those choke points by creating a single direct line service would help, he said.
My interest is seeing farmers put products on a rail car and move it directly to market without long delay, Dorgan said.
I looked at that and decided this is something I would support, Dorgan said, adding Canadian Pacific asked if he would help and he agreed.
The bottom line is this adds options for all shippers, including agriculture, Dorgan said.
You can click on the listen bar below to hear more of Ron's interview with former Sen. Byron Dorgan.
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