CALGARY
The CEO of Canadian Pacific Kansas City Ltd. is calling out proponents of a massive proposed rail merger in the United States for alleged threats against customers.
Keith Creel said Wednesday that cautioning shippers against voicing resistance to Union Pacific’s attempted acquisition of Norfolk Southern would mark an attempt to “chill” dissent against a controversial marriage of two of the continent’s largest freight railways.
“My phone rings and people tell me when they get threatened. Customers share that,” Creel told analysts on a conference call.
“‘If you’re not for us you’re against us, don’t be on the wrong side of history ... don’t side with the losers,’” he said, citing warnings he claimed shippers have received.
The increasingly acrimonious battle over Union Pacific’s would-be US$85-billion acquisition of Norfolk Southern, announced in July 2025, is currently before American regulators.
Creel and other critics worry the deal could trigger a wave of mergers across an already concentrated sector, six companies dominate the North American rail industry.
Competitors and customers say the acquisition would cost shippers, and ultimately consumers, and place unprecedented market power in the hands of a single railway, which would handle some 40 per cent of American freight traffic.
Union Pacific and Norfolk Southern argue that getting hitched would slash costs and prompt rivals to lower their rates to compete.
On Wednesday, Creel pointed to an accusation levelled by U.S. Sen. Tammy Baldwin in a July letter to the U.S. Surface Transportation Board. She wrote that in a speech to a railway shippers association in Houston last March, Union Pacific chief executive Jim Vena made “a thinly veiled threat ... to raise rates for customers who did not publicly support the merger.”
Union Pacific has said the comment was “taken out of context” and suggestions to the contrary mark an effort to distract from the benefits of a transcontinental railroad.
In an email, the Chicago-based company said the acquisition is backed by more than 2,000 stakeholders, including more than 500 shippers.
Spokesperson Robynn Tysver said those customers “understand how this end-to-end combination will enhance competition and deliver broad public benefits” by shifting some two million truckloads from highway to rail transport, protecting union jobs and driving cost savings.
Despite his stated belief that merger approval is unlikely, Creel is steeling himself for the possibility. Should the deal get a thumbs-up, CPKC is asking regulators for safeguards to preserve competition, including gateway protections, so Union Pacific rivals cannot be barred from key interchanges, and shipper access to allow switching between railways.
“Not a Christmas list, a reality list,” he said, adding that the acquisition felt like a “lump of coal” in his view.
On Wednesday, CPKC reported flat profits despite a big boost in revenue in its latest quarter.
Net income attributable to shareholders stayed effectively flat at $917 million in the quarter ended Sept. 30 versus $920 million in the same period a year earlier, the Calgary-based railway said.
Third-quarter revenues rose 15 per cent year-over-year to $4.22 billion, bolstered by higher fuel surcharges but also a major jump in grain and shipping container volumes. The two categories saw revenues leap by 29 per cent and 22 per cent respectively, amounting to 42 per cent of freight revenues.
Coal, potash, fertilizer and automotive volumes all fell, but revenue rose across the board except for coal, where the cash intake was roughly on par with last year’s.
The company’s bottom line was dented by fuel costs that surged 61 per cent year-over-year to $667 million, making it the largest expense outside of labour due to the soaring price of diesel.
On an adjusted basis, core diluted earnings increased 16 per cent year-over-year to $1.28 per share from $1.10 per share, but fell short of analysts’ expectations of $1.32, according to financial markets firm LSEG Data & Analytics.
Grain and intermodal lead growth
Grain freight revenue rose 29 per cent to $904 million, with grain carloads up 20 per cent to 158,000. Intermodal revenue increased 22 per cent to $815 million.
John Brooks, the railway’s chief marketing officer, said the company expects continued grain volume growth for the end of the year and into early 2027.
The company also announced a five-year agreement with coal-miner Elk Valley Resources, set to begin next year, to move more steelmaking coal from southeastern British Columbia to Vancouver for export.
CPKC’s diluted earnings per share rose three per cent to $1.04. The company said its results included a $94 million income tax expense tied to a Canada Revenue Agency reassessment of prior-year taxes related to the Kansas City Southern acquisition, an 11-cent diluted EPS impact.
Third-quarter results also included $17 million of advisory costs related to the U.S. Surface Transportation Board’s review of the proposed Union Pacific merger, a two-cent diluted EPS impact.
CPKC said it repurchased 11,542,470 common shares for $1.49 billion during the quarter under its normal course issuer bid.
This story was written by the e2gold.ca newsroom from reporting by BNN Bloomberg, CTV News, Calgary Herald and Securities.io. Quotes are checked word for word against that reporting.