RSSI News

 

Canadian Pacific, Kansas City Southern Will Merge into “The First USMCA Railroad,” CPKC

CP and KCS described the US$29 billion as “enterprise value” that includes the assumption of $3.8 billion of outstanding KCS debt. The transaction, which has the unanimous support of both boards of directors, values KCS at $275 per share, representing a 23% premium, based on the CP and KCS closing prices on March 19, 2021 (and $270 per share, representing a 26% premium, based on the respective CP and KCS 30-day volume weighted average prices (VWAP).

 

The two companies informally notified the U.S. Surface Transportation Board (STB) about the deal on Saturday evening, March 20. The STB will need to approve the transaction. If approved, the merger will be the first Class I transaction of its type since the late 1990s, when Norfolk Southern and CSX acquired 56% and 72%, respectively, of Conrail.

 

CP will establish an independent voting trust to acquire the KCS shares. Upon shareholder approval of the transaction, and satisfaction of customary closing conditions, CP will acquire KCS shares and place them into the voting trust. This step is currently expected to be completed in the second half of 2021. Following the closing into a voting trust, common shareholders of KCS will receive 0.489 of a CP share and $90 in cash for each KCS common share held. KCS common shareholders are expected to own 25% of CP’s outstanding common shares, “providing the ability to participate in the upside of both companies’ growth opportunities. Following final STB approval, KCS shareholders will additionally participate in the realization of synergies resulting from the combination.”

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Chuck Baker Takes Short-Line Association's Reins

 

The American Short Line and Regional Railroad Association (ASLRRA) in January named Chuck Baker president. He assumed the post Feb. 4.

 

Baker, 40, succeeds Linda Bauer Darr, who resigned in July 2018 to become president and chief executive officer of the American Council of Engineering Companies.

 

Baker previously was a partner at Chambers, Conlon & Hartwell LLC (CC&H) and president of the National Railroad Construction & Maintenance Association (NRC). He joined the NRC in 2004 as manager and later served as vice president, executive director and president.

 

At CC&H, Baker represented such clients as the NRC, OneRail Coalition, Norfolk Southern Railway and CN. He also serves on the board for the Short Line Safety Institute, which the ASLRRA helped form in 2015.

 

Baker will be an enthusiastic and tireless advocate for short lines, ASLRRA Chair Judy Petry wrote in an emailed letter. He also will be adept at building strong teams to advance key issues, such as obtaining a permanent Section 45G tax credit for regionals and short lines, she believes.

 

In January, the Building Rail Access for Customers and the Economy (BRACE) Act was reintroduced in the House (H.R. 510) and Senate (S. 203). The BRACE Act — which proposes to make the short-line tax credit permanent — died in the last Congress. Created in 2005, the tax credit expired at 2017’s end.

 

“Chuck knows how to get things done in Washington, having worked on issues of importance to us in Congress and with industry regulators,” wrote Petry, the president and general manager of Farmrail System Inc. “In addition to his understanding of the rail industry ... he has led several trade associations.”

 

NRC loses a major contributor

During his time at the NRC, Baker helped the association grow substantially while serving as leader, said NRC Chairman Mike Choat in a prepared statement. Baker’s accomplishments include doubling membership to nearly 430 companies; boosting annual conference attendance to more than 1,100; establishing an annual rail construction and maintenance equipment auction; and launching education and scholarship initiatives, Choat said.

 

“After having worked with Chuck over the past 10 years, it is clear we will all miss him. He has worked extremely hard with the executive committee to move the organization forward and operate it like a business,” Choat said.

 

Prior to joining CC&H, Baker — a Baltimore native — worked on a surface transportation policy project in Washington, D.C. He also served as an investment banker for Deutsche Bank Securities in San Francisco, specializing in corporate finance and mergers and acquisitions.

 

Now, he looks forward to doing his part at the ASLRRA to ensure the short line industry is prepared to meet tomorrow’s challenges

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Ian Jefferies Named as New AAR CEO

On January 1, 2019, AAR’s Senior Vice President of Government Affairs Ian Jefferies will succeed current President and CEO Ed Hamberger who is retiring after two decades of service to America's freight railroads. Jefferies began his tenure at the AAR in 2013 after working on the Senate Commerce Committee and at the U.S. DOT and the Government Accountability Office. “I am honored to work for a bedrock industry that delivers every day for the economy,” Jefferies said, “Railroads are charting a bold path forward, and AAR’s dedicated team is armed with the knowledge and insight to help build tomorrow’s railroad today.”

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CABT Update: Coalition Keeps Bigger-Truck Provisions Out of Senate Committee

 

The Senate Appropriations Committee met earlier today to mark up the Transportation, Housing and Urban Development (THUD) appropriations bill that was expected to be a vehicle for legislation approving both longer double-trailer trucks and heavier single-trailer trucks. The threat was especially serious because the new committee chair has been the chief sponsor of the Double 33s provision in the past. I am happy to report that neither bigger-truck provision was included in the appropriations bill, which was a setback for bigger-truck proponents.

 

This is yet another significant victory for our broad coalition of community and business leaders, and many thanks to those of you who contacted Congress. As I wrote to you earlier this week, Double 33s proponents have been aggressively lobbying Congress since early this year, and were publicly pushing their longer-truck provision in these final weeks through radio and digital ads placed inside the Beltway. Despite the backing from these powerful companies, outreach and pressure from the coalition of rail supply associations, short lines, Class Is and trucking companies was incredibly effective. Among our many partners that deserve thanks and appreciation for their efforts, I want to specifically thank AAR, ASLRRA, NRC, REMSA, RSI, RSSI, TCA and each of their respective members.

 

Our partners made important contributions to this successful campaign but two specific projects stand out to me. The first is our fly-in of state troopers, sheriffs and police chiefs from 19 states, who volunteered their time to travel to D.C. and meet with their Members of Congress. And the second is the letter delivered earlier this year to Congress by over 1,000 local officials from across the country—mayors, county commissioners and public works directors—opposing bigger trucks because of the negative impacts they would have on local communities. When respected community leaders are offered a platform to voice their concerns about bigger trucks and offer their expertise, Members of Congress listen. CABT delivers that platform.

 

The appropriations bills will next be heard on both chamber floors, where we will need to keep an eye on any amendment action, but we are confident that, for now, momentum is on our side.

 

Our victories are always hard fought. We must keep in mind that bigger-truck proponents are highly motivated and have vast resources to achieve their goals, as demonstrated by their recent ad campaigns and lobbying efforts. Bigger-truck proposals will remain a perennial threat for the foreseeable future. We remain committed to holding the line on bigger trucks, both in Congress and in state legislatures across the country.

 

We will celebrate today's victory, thanks in large part to your support, and we will return tomorrow to prepare for the next campaign.

 

Please let me know if I can answer any questions, and thank you for your continued support of CABT.

 

Bill Gibb

President

Coalition Against Bigger Trucks

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