North American Railroads: Additional Thoughts on Supplemental Filings After Discussions with Industry Experts

研报英文原文证据摘录

North American Railroads: Additional Thoughts on Supplemental Filings After Discussions with Industry Experts

er the public benefits, including traffic diversion. The

revised Committed Gateway Pricing (CGP) was largely recognized as a modest

improvement based on an expanded reach which doubled the number of eligible carloads.

However, the CGP is still widely viewed as limited, temporary, and potentially rate-

increasing for many eligible users, an argument that will likely hinge on the applicants’

own math showing less than half of eligible movements would immediately price down

to the CGP cap. We expect the merits phase of the review to center less on whether the

applicants offered programs and more on whether those programs like the CGP translate

into durable public benefits. Additionally, we found that the Applicants’ suggestion that

the merger not be evaluated on traffic diversions triggered a lively debate as to whether

or not the UP/NS could claim truckload conversion as a public benefit while stated that

the merger should not be evaluated on the success of diversions.

• The ability to obtain benefits without a merger will be scrutinized. While UP/NS

claim only a true merger can deliver the promised public benefits, the CN/UP partnership

shows that major operational improvements and expanded market access can be achieved

through commercial agreements. Several experts wondered if the CN/UP agreement

would be pulled into the broader environmental and traffic flow analysis considering UP

noted that the merger drove this deal. The supplemental materials offer little concrete

evidence or historical precedent that partnerships don’t work, in large part because

neither party is willing to invest the capital to facilitate meaningful growth. However, one