CPKC: forecasted business diversification

Projected Canadian Pacific Kansas City's business mix, based on 2020 freight revenue

Characteristic	Intermodal	Bulk	Merchandise
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Release date

March 2021

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Region

North America

Survey time period

2020

Supplementary notes

Figures are expressed as a percent of the 2020 freight revenue of Canadian Pacific and Kansas City Southern.

Citation formats

In March 2021, Canadian Pacific Railway and Kansas City Southern Railway (KCS) announced a stock and cash merger of both companies to create the first United States-Mexico-Canada rail network named Canadian Pacific Kansas City (CPKC). The fusion of both railroad companies is projected to lead to a more diversified business mix, with merchandise cargo projected to represent just under half of the company's activities. Bulk cargo, at ** percent, will be double the current share of revenue streams it represented for Kansas City Southern in 2020.
Canadian Pacific and KCS in the North American market

Out of the leading North American railroad companies, Canadian Pacific Railway and KCS ranked and *** respectively, based on both operating revenues and transported carloads. At about **** billion U.S. dollars (*** billion in Canadian dollars), Canadian Pacific’s total revenue was over double KCS’, which amounted to **** billion U.S. dollars. The difference in revenues is a stark contrast with the fact Canadian Pacific only transported just over *** more carloads than KCS in 2020.
A closer look at Canadian Pacific

In 2020, both companies had operating expenses which made up over half their revenue. Canadian Pacific’s operating ratio has been steadily decreasing to **** percent in the 2020 financial year, demonstrating the efficiency of the company. That same year, close to ** percent of Canadian Pacific’s revenue was freight revenue. ** percent of this income was intermodal, while about * percent of this intermodal revenue came from domestic cross border and other international transport. However, the merger of the two companies opens up the market to a network of about * miles and a new business expected to be worth around *** billion U.S. dollars of combined revenues.