Sunday, November 22, 2015

Parallel Universe

What if...

Back in 1996, NS had not fought the CSX/Conrail merger, but, instead, extracted a pound of flesh during the STB approval process. Let's assume that "pound of flesh" was intended to dilute the Conrail stronghold on NY/NJ.

Let's assume:

1. NS gets to purchase:

  • The Southern Tier and Croxton Yard
  • The B&O from DC/Phila/Baltimore to Chicago
  • Conrail's ex-Reading line from Phila to Bound Brook and rights beyond to connect to the port and Croxton.

2. CSX/CR have to accept reciprocal switching in North Jersey and Detroit.

3. NS would still have a big pile of cash to spend...and buys CP. Which is a bit of a train wreck, and pretty cheap and not a horrible fit.

East is sort of balanced again.  NS + CP is significantly large enough to keep UP or BNSF from swallowing them whole.

Mergers go fairly smoothly because they are end - to -end and solid "Day One" operating plans can be developed and gradually implemented (not like the CR split!)

Smooth integration means that BNSF + CN is allowed.

UP + NS/CP follows on less than a decade later and finally BNSF/CN + CR/CSX.

And we're done.