North America - Canadian Pacific Railway Ltd. (CP) has its first on-the-record allies in the quest to acquire Norfolk Southern Corporation (NS).
 
Oil-and-gas terminal operator Dakota Plains Holdings Inc. and three other rail customers filed letters this month to the U.S. Surface Transportation Board (STB) in support of the proposed takeover.
 
Filings to the board so far have been dominated by opponents of the merger, who warn it could raise rates, hurt service, and reduce employment.
 
CP Chief Executive Officer Hunter Harrison has said that merging with NS would increase efficiency by creating a coast-to-coast railroad, reducing the need to exchange cars in congested hubs such as Chicago.
 
The combined railroad also would be able to wring out cost savings and improve service, said Harrison, who has the support of CP investor Bill Ackman.
 
The Canadian carrier's proposal "introduces a number of positive, future-focused, ideas to vastly improve North America's transportation network," Dakota Plains President Gabe Claypool wrote in a letter dated 15 Jan 2016.
 
A merger "would improve overall service while creating meaningful competition" among the country's biggest railroads, he said.
 
There can be a lag between when letters are sent and when they are posted by the STB.
 
Service Improvements
 
A combination "will create a rail network that offers significant opportunities for service improvements and efficiencies, not the least of which is the relief for Chicago and other congested gateways," Lance Norman, executive vice president of APPS Transport Group, which is based in the Toronto suburb of Mississauga, wrote in a letter dated 13 Jan 2016.
 
"I can foresee no reduction in competition by reason of the acquisition and in fact only increased competition for trucks and other rail carriers," he wrote.
 
Freight forwarder Atlantic Pacific Lines and SGR Energy LLC, a fuel blender and manufacturer, also sent letters supporting the deal.
 
Other rail customers, such as Subaru of America Inc., and the Alliance of Automobile Manufacturers, and some federal and state lawmakers have urged the STB to reject a deal.
 
NS has rebuffed CP three times.
 
The letters of opposition posted on the STB's web site mirror the general view of the industry, Lance Fritz, CEO of Union Pacific Corp., the largest publicly traded railroad in North America, said this month.
 
Frederic Tomesco.