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Kansas City Southern
- For The Railroad Industry Professional

Kansas City SouthernKansas City Southern (KCS) is a transportation holding company with railroad investments in the United States, Mexico and Panama. Its rail holdings and strategic alliances link key commercial and industrial centers of the United States, Mexico and Canada.

Kansas City Southern's primary U.S. holding is Kansas City Southern Railway Co., a Class I railroad operating 3,500 route miles in a 10-state region, serving the central and south central United States. Among the Class I railroads, Kansas City, Mo.-based Kansas City Southern Railway offers the shortest route between Kansas City, the second-largest rail hub in the United States, and the Gulf of Mexico.

Kansas City Southern (KCS) indirectly owns and controls Mexico City-based Kansas City Southern de Mexico S.A. de C.V., a 3,100-route mile rail system that serves northeastern and central Mexico, and the port cities of Lázaro Cárdenas, Tampico and Veracruz. The company also has a 50 percent interest in Panama Canal Railway Co., which provides ocean-to-ocean freight and passenger service along the Panama Canal. Mi-Jack Products Inc. also owns a 50 percent stake in the 47.6-mile rail line.

Other Kansas City Southern (KCS) rail holdings include the wholly owned Texas Mexican Railway Co. (Tex Mex), a 157-mile line that, with its trackage rights, operates along more than 465 route miles, linking Kansas City Southern Railway and Kansas City Southern de Mexico; and Meridian Speedway L.L.C., a majority owned, consolidated subsidiary that owns the former Kansas City Southern Railway rail line between Meridian, Miss., and Shreveport, La. — a portion of the Kansas City Southern Railway route between Dallas and Meridian known as the Meridian Speedway. Norfolk Southern Corp., through its wholly owned subsidiary The Alabama Great Southern Railroad Co., owns a minority interest in Meridian Speedway L.L.C.

Kansas City Southern (KCS) officers include Patrick Ottensmeyer, president and chief executive officer; Brian Hancock, executive vice president and chief marketing officer; Warren Erdman, executive vice president of administration and corporate affairs; Michael Upchurch, executive vice president and chief financial officer; Jeffrey Songer, executive vice president and chief operating officer; Michael Naatz, senior vice president of operations support and chief information officer; Lora Cheatum, senior vice president of human resources; Mary Stadler, senior vice president and chief accounting officer; and William Wochner, senior vice president and chief legal officer.

Kansas City Southern (KCS) and the notion of the NAFTA Railway

Kansas City Southern (KCS) was founded in 1887 by Arthur Stilwell, who envisioned a direct, north-south rail route to the Gulf of Mexico. At the time, his vision was considered anything but realistic. But by the 1990s, traffic patterns and trade realities had changed, spurred by 1994's North American Free Trade Agreement, which removed most barriers to trade and investment among the United States, Canada and Mexico. Mike Haverty, who at the time served as CEO of Kansas City Southern Railway, subsequently helped convince the company (then known as Kansas City Southern Industries Inc.) to invest in Mexico.

In 1995, Kansas City Southern (KCS) entered into an agreement with Grupo TMM S.A. de C.V., a Mexican-based ocean shipping and logistics company, to pursue one of the concessions of Mexico's soon-to-be-privatized rail lines. Around the same time, KCS acquired a 49 percent interest in Mexrail Inc., which owned all of the Tex Mex's stock. The Tex Mex provided a link between the United States and Mexico via the International Bridge in Laredo, Texas. The KCS/Grupo TMM bid won Mexico's Northeast Line rail concession; by June 1997, the privatized railway, rechristened Transportacion Ferroviaria Mexicana S.A. de C.V. (TFM), was open for business. And the so-called NAFTA Railway was born.

For Kansas City Southern (KCS), the aim was for the U.S-Mexican corridor to function as a single entity under common control. In late 2004, KCS acquired full ownership of Mexrail Inc. and Grupo TMM's interest in TFM. In 2005, KCS acquired the remaining 20 percent interest in TFM, making TFM — which would be renamed Kansas City Southern de Mexico — a wholly owned subsidiary.

Cross-border business now accounts for at least one-quarter of KCS's annual revenue. In 2016, KCS’ net income totaled $480 million, or $4.43 per diluted share, compared with $485 million, or $4.40 per diluted share, in 2015. The railroad posted $2.3 billion in revenue, down 3 percent year over year, while carloads declined 2 percent to 2.17 million. Operating income rose 2 percent to $819 million and KCS’ operating ratio improved 1.9 points to 64.9.

In 2011, Chairman Emeritus Mike Haverty received Progressive Railroading's Railroad Innovator Award
. In 2012, KCS celebrated its 125th anniversary.