Competitive Analysis of Canadian Pacific/Kansas City Southern Railway Merger

An Analysis Group team worked with academic affiliates John Mayo and Jeffrey Macher to provide economic expertise, analysis, and testimony on behalf of Norfolk Southern Railway (NS), represented by Weil, Gotshal and Manges, in proceedings related to the proposed merger between Canadian Pacific Railway (CP) and Kansas City Southern Railway (KCS).

In association with Dr. Macher, an expert on the economics of freight railroads, Dr. Mayo initially advised Norfolk Southern on matters related to the horizontal and vertical effects of the merger, including the need for open gateways policies (i.e., the free exchange of traffic at major freight rail interchange locations). Dr. Mayo also filed three expert reports, provided deposition testimony, and testified at public hearings held by the US Surface Transportation Board (STB). In addition, Dr. Mayo rebutted allegations from CSX, a competing Class I railroad, that the Meridian Speedway joint venture between NS and KCS was anticompetitive.

Ultimately, the STB approved the merger between CP and KCS, and, consistent with the economic advice of Dr. Mayo, dismissed CSX’s claims related to the Meridian Speedway.

Analysis Group’s research and analytical team was led by Managing Principal Christopher Borek, Vice President Ivan Maryanchyk, and Manager Peter Jones.