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Canadian Pacific officials today said they were "surprised and disappointed" to learn that Union Pacific Railroad's chief executive is reportedly working behind the scenes with other railroads to prevent consolidation of the Class I rail industry.
They reiterated their view that a CP merger with Norfolk Southern Corp. would enhance competition and is in the public's interest. They noted that UP itself has been the product of numerous mergers that "created one of the largest route networks in North America."
"It is unfortunate that UP would try to use political pressure to co-opt the regulatory process and prevent other railroads from enjoying these same benefits and becoming more effective competitors to UP," CP officials said in a press release.
UP Chairman, Chief Executive Officer and President Lance Fritz was quoted by the Journal of Commerce as saying a CP-NS merger is not in the best interest of the rail industry or customers. Fritz was speaking to attendees of the annual winter meeting of Midwest Association of Rail Shippers, according to the Journal.
A CP-NS merger would damage competition and set off a string of consolidations that would present challenging headwinds to the North American rail industry, the Journal reported.
"There are a lot of risks in front of us. I've outlined a lot of them," Fritz said, according to the Journal. "But, job 1, from our perspective, is to stop a Class I merger from occurring."
CP officials responded to the reported comments by adding that Fritz's "attempts to rally support for the status quo among the other Class Is demonstrate a disregard for competition, the processes of the STB, and the needs of shippers and the broader economy."