Vancouver British Columbia - Canadian Pacific Railway (CP) is on the right track in its pursuit of U.S.-based Norfolk Southern Corporation (NS).
 
The acquisition of one of America's big four railway companies would significantly extend CP's geographic footprint and allow it to diversify away from commodities reliance and into the rich U.S. consumer heartland.
 
CP's revised offer last week to NS upped the ante for the U.S. railway's shareholders, but the deal is about far more than bottom-line share price.
 
Shippers in B.C. and elsewhere along the North American West Coast also stand to benefit.
 
The merged entity would establish a rail network with continental reach that would have the flexibility to reroute goods around such railway bottlenecks as Chicago.
 
That would be gold for goods shippers now at the mercy of North America's largest railway interchange and for a US$4 trillion global container-shipping sector hit hard by Asia's economic slowdown and the continued cannibalization of shipping rates from an overly ambitious expansion of container-shipping fleets.
 
Recovery in those rates is not expected any time soon.
 
So any efficiencies made in getting product to market once containers have been offloaded from ocean carriers fall directly to shipping bottom lines.
 
West Coast North American ports, already suffering from an ongoing migration of container traffic to East Coast options in the wake of the delays caused by the protracted 2014-2015 longshore contract negotiations at American ports, need all the intermodal infrastructure efficiency improvements they can get to retain Asia Pacific container business.
 
More efficient rail service is fundamental to that equation.
 
Shippers in some quarters have raised concerns over what they fear will be fewer options and higher prices resulting from a CP-NS merger.
 
But such initiatives as "modified terminal access", which would allow competing rail companies to service customers at terminals of the new merged entity if they're not getting the best service at the best price, speak to CP's commitment to creating fewer detours to market, not more.
 
Anonymous Author.