The Canadian Pacific -- Kansas City Southern Railway Merger and the Optimal Railroad Network

Yanyou Chen ()
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Yanyou Chen: University of Toronto, Department of Economics, Max Gluskin House, 150 St. George Street, 310, Toronto, ON, Canada, M5S 2E9

No 21-12, Working Papers from NET Institute

Abstract: This project evaluates the optimal transport network in North America by first analyzing the proposed $25 billion merger between the Canadian Pacific Railway and the Kansas City Southern Railway. Then this project studies different sequences of mergers and find the optimal path of mergers to form the transport network in North America. Current simulation results suggest that average over all origin-destination markets, the proposed merger between Canadian Pacific Railway and the Kansas City Southern Railway will decrease the average shipment cost by 6.27%. Among different local markets, regions near or utilize the route from Des Moines, IA -- Kansas City, MO -- Joplin, MO will have the largest efficiency gain from the proposed merger.

Keywords: Merger; Transport Network; Railroad (search for similar items in EconPapers)
JEL-codes: L13 L43 L92 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2021-09
New Economics Papers: this item is included in nep-com, nep-ind, nep-ore, nep-reg, nep-tre and nep-ure
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