BMWED Statement on Canadian Pacific & Kansas City Southern Merger Published: Mar 15 2023 3:50PM
BMWED anticipated the Board's approval of the CP/KCS Merger, so we are not surprised by the STB’s decision. BMWED agrees with the Board's determination requiring Labor Protections and Cramdown, and we expect CP to abide to those terms as they stated they would in their filings before the Board. Cramdown applies when the carrier wants to consolidate or coordinate formerly separate territories (CP vs. KCS territories), and two or more existing collective bargaining agreements are involved, the union(s) can pick the agreement that will apply to the consolidated/coordinated locations. CP also stated in their filings that this merger would create improvements in carrier services, and create over 750 jobs in the railroad industry. We anticipate the increase in employment in the freight rail industry and the related improvement in services.
Forty years ago, there were many more freight rail carriers than there are today, and many of the railroads at that time were experiencing significant financial difficulties. Those circumstances do not remain today. The Class I freight railroads have been on a decades plus run of record profits, and with the approval of this merger, the U.S class I railroad carriers are now certainly consolidated into effective duopolies and they all remain positioned to be extremely profitable for the years to come. But there remains a serious concern in the industry regarding the level of quality of service the carrier’s provide, and the long-term viability of attracting and retaining talent in the industry. In other words, we need a regulatory regime for the industry that exists today not the one that existed in the 1980s. We need a regime that encourages the STB to ensure that the service commitments that were made in connection with the carrier mergers are adhered to, that the railroads live up to their common carrier obligations and that they act consistent with the 49 U.S.C. 10109 - National Rail Transportation Policy, Sections (9) and (11), which are “to encourage honest and efficient management of railroads” and “to encourage fair wages and safe and suitable working conditions in the railroad industry.”