Toronto, Ontario — A big acquisition in the world of railway shipping is giving off a glimmer of hope for auto industry experts who are hoping that Canadian Pacific Railway Ltd.’s agreement to buy Kansas City Southern could lead to a smoother supply chain between Canada and the U.S.
“Rail is a key piece of the overall transportation network, and if this merger increases options for the industry and lowers costs and makes the overall system more efficient, that’s fantastic,” said Brian Kingston, head of the Canadian Vehicle Manufacturers’ Association, which represents the interests of the Detroit Three in Canada.
Acquisitions in the rail shipping sector are subject to approval from the five-person U.S. Surface Transportation Board, however, so it will still be some time until the potential effects of this deal are felt.
“They have total authority over making the decision over whether this goes forward,” said Deb Miller, who served as a member of the board until in 2018.
“I think this will get a very long and hard look from the board.”
Officials from CP expect the deal to achieve approval some time in 2022, but recognize that anything could happen until then.
