This story has legs. Now the office staff of HMM are involved, and there are sympathy strikes by other Korean line seafarers. Seafarers have been severely hurt by the Covid stress, some not seeing shore for long periods. Ocean carriers such as HMM are now making bundlesofmoney becauseofvast shortages of container carryng capacity and ports that can’t deal with the increased flow, and workers on the ships recognize that now is the time to throw a wrench into the money-making shipping lines’ projections.
If you are interested in rail transport, you certainly will be interested in the proposed merger of the Kansas City Southern (KCS) rail line with a Canadian railroad.
Both Canadian Northern (CN) and Canadian Pacific (CP) have made offers to merge with KCS.
It’s important because either merger would let there be direct rail service between Canada and Mexico. Mexico is an important low-cost component manufacturing country, and Canada is a highly developed first-world economy, with also many intrnational connections. KCS has taken great pains over the last 10 years to develop service into and outof Mexico, and is probably the paramount player. Other major US railroads, such as BNSF, UP, and Norfolk Southern (NS), have not worked to build this capability to the same degree. So KCS is a kind of unique prize, especially for the Canadian railroads.
So far the story is one of competing buyers for KCS. CP made the first offer, but as time was running out for acceptance, CN came in with a larger offer. It involves some specialized and complex merger techniques. The Surface Transport Board (STB), a US government agency which regulates railroads in the US, has just rejected the merger, based on the form itis to take. This means that the two firms in the current merger discussions will need to try to rearrange their proposed deal structure to try to meet the STB objections. It also gives the alternate partner, CP, an opportunity to come back to the negotiations with KCS and make an offer more likely to succeed.
If there is a merger, what will happen? One thing you can be sure of is that over time the leader in the merger, the Canadian firm, will influence rail operations more and more. For shippers, it will be easier to make arrangements from Mexico to the US and Canada, and vice versa. It’s not clear how domestic US shippers will be affected. KCS serves a rural midwestern region that is not as well served by other railroads, and that will probably continue. ButKCS connections with other parts of the US may suffer a bit.
The combination of companies will be a powerhouse, putting the line in the class of UP and BNSF, the top major railroads in the US.
Amazon is doubling down on next-day delivery. By using their own air freight in conjunction with other airlines, they are abot to reach 70% of the population.
I loved two-day service and never thought I needed something faster. But I have to admit, getting it the very next day is a rush. And sometimes, that’s exactly what I need— especially with Covid lurking, it’s an alternative to going to the store and being exposed.
One of the interesting features of the article is the map of Amazon’s air service network. It’s as prodigious as any major airline. Of course, it’s only for packages.
I wonder what business they could do with this network should they decide to start offering air package transport for other companies. For instance for pharmaceuticals.
Report: Amazon Air puts 70% of US population within next-day reach More airport hubs, destinations and flights put airline in position to handle big Christmas package volume
Eric Kulisch, Air Cargo Editor Wednesday, September 1, 2021
Supply Chain and Logistics 