Kansas City Southern expands Mexico rail service
The proposed $29 billion merger between Canadian Pacific (NYSE: CP) and Kansas City Southern (NYSE: KSU) aims to capitalize on an expected increase in the flow of trade among the U.S., Canada and Mexico.
The merger would create the first company with a rail network spanning all three countries and enhance the facilitation of the movement of goods across the three nations.
“The new competition we will inject into the North American transportation market cannot happen soon enough, as the new United States-Mexico-Canada Agreement (USMCA) trade agreement among these three countries makes the efficient integration of the continent’s supply chains more important than ever before,” Keith Creel, CP president and CEO, said in a statement announcing the proposed merger.
The proposed CP-KCS merger comes against the backdrop of Kansas City Southern’s $167 million investment in Mexico last year.
Kansas City Southern de México (KCSM), KCS’ Mexican operations, include railways serving northeastern and central Mexico as well as key port cities including Veracruz, Tampico and Lazaro Cardenas.
One of KCS’ major projects was the completion of part of a 12.11-mile double-track line that connects Mexico’s port of Veracruz on the Gulf of Mexico.
KCSM ran the first revenue train over the new double-track access into the expanded Port of Veracruz in February, company spokeswoman Dionele Carlson…