WASHINGTON — Canadian Pacific Kansas City says it has shippers lined up to export grain through the ports of Houston and Galveston, but they’re awaiting a regulatory decision regarding whether unit trains can move over Union Pacific trackage rights south of Beaumont, Texas.
CPKC told the Surface Transportation Board last week that it has four customers in CP’s Soo Line territory who would like to ship grain to the Gulf Coast via Kansas City.
“CPKC has had at least four concrete requests, including being notified this week that a customer that needs to move grain to Houston is delaying the shipment in hopes that a resolution by the Board will confirm the availability of the KCSR-direct route,” CPKC told the board. “Unfortunately, UP continues to object to KCSR providing that competition, preferring that CPKC interchange traffic to UP at Kansas City so that UP can charge its tariff rates south of Kansas City.”
CPKC sought to route grain trains from the Upper Midwest to Houston and Galveston last summer. But UP says grain from the Upper Midwest is not eligible to use the trackage or haulage rights south of Beaumont.
UP says the trackage rights, which are related to UP’s 1988 acquisition of the Missouri-Kansas-Texas Railroad, were never intended for grain shipments originating outside of the Omaha/Council Bluffs-Kansas City corridor.
“As KCS’s letter recognizes, Union Pacific stands ready and willing to cooperate with CPKC to serve shippers seeking to move grain via Kansas City to Houston and Galveston, so no shipper is being deprived of service to any destination served by Union Pacific,” the railroad told the STB. “Further, and as relevant to the parties’ dispute, CPKC-served shippers continue to have access to essentially the same routing options that existed before the ICC approved the Union Pacific-MKT merger in 1988, consistent with the ICC’s goal of preserving—not expanding—the pre-merger level of competition.”
UP last year sought to have a federal court rule on what it considered to be a contract dispute. But in February the court dismissed the case and sent it back to the STB.
Ceres Global Ag, a grain shipper based in Golden Valley, Minn., that wants to use a CPKC route to Houston/Galveston, wrote to the board last month. “A timely decision confirming KCSR’s rights would improve the competitive rail environment and benefit our company and other market participants by creating efficient, single-line transportation options that are not yet available,” Carlos Paz, the company’s CEO, wrote.
The letter was made public in an STB filing last week.
If CPkc would get off their high horse and WORK WITH UP and not try to ram something down UP’s throat that they don’t have a right to, everybody could be taken care of. But CPkc wants their cake and to eat it too. And with that attitude, they won’t get any US railroad to cooperate with them. Don’t blame Ceres Global as they have been sold service that doesn’t exist. And Keith Creel is just trying to prove a point he has already lost on and thinks that sticking his tongue out at UP will make them see “Facts.” Bad strategy. UP and BNSF were in Texas long before CPkc or KCS ever was,
You got to add to this that UP will do everything it can to delay KCS trains through Houston which is already a mess (employees tell me that). You just wonder if CPKCS could pull the same thing on UP with Dallas to Meridian , Ms. route. Tit for tat?
I’m assuming Houston and Galveston have the facility to transload grain to ships. If “four customers” means four large customers then maybe it’s time build another transload facility on the Gulf that CPKC serves directly.
There you go! Except Mr. Spendthrift at CPkc wants everything for free and heaven forbid that he act like a real railroad and build his own facility. Why do you think Hunter Harrison thought so mightily of him? Never pay for anything you can get for free and that seems to be Keith Creel’s modus operandi…
All UP has to do is meet CPKC’s rate and enroute time. But wait, even though that would mean more revenue the OR gods might worry that it might up the OR 0.01 %
It’s too bad the UP doesn’t serve the origin grain shippers, that are located on the old Soo Line(as stated in the article). Another point against the UP in this case is the current aspect of the STB at this present time…which is all about increased competition so I don’t think the UP’s suggestion of grain NOT being included in the ICC decision of the M-K-T merger is going to fly with Oberman an Co.. Besides, unless the decision specifically spelled out it excluded grain or included specific commodities then the UP is talking hogwash.
They do when it gets down to brass tacks. But CPkc has sold Ceres a “one line direct to Mexico…” or elsewhere that doesn’t exist. And CPkc knows it! UP could serve Ceres, if not directly then via CN, or CN connections, a road that does work with everybody else without being so obnoxious.
@Vincent: Except when comes to CPKC at Spaulding