United States Department of Agriculture

Office of the Secretary

Washington, D.C. 20250

An Equal Opportunity Employer

April 22, 2022

Hon. Martin Oberman Hon. Michelle Schultz

Chairman Vice Chairman

Surface Transportation Board Surface Transportation Board

Hon. Patrick Fuchs Hon. Robert Primus

Member Member

Surface Transportation Board Surface Transportation Board

Hon. Karen Hedlund

Member

Surface Transportation Board

RE: STB Docket No. FD 36500, Canadian Pacific Railway Limited; Canadian Pacific 

Railway Company; Soo Line Railroad Company; Central Maine & Quebec Railway 

US Inc.; Dakota, Minnesota & Eastern Railroad Corporation; and Delaware & 

Hudson Railway Company, Inc.—Control—Kansas City Southern; The Kansas City 

Southern Railway Company; Gateway Eastern Railway Company; and The Texas 

Mexican Railway Company

Dear Chairman Oberman, Vice Chairman Schultz, and Members Fuchs, Primus, and Hedlund:

The U.S. Department of Agriculture (USDA) appreciates the Surface Transportation Board’s 

(Board) careful consideration of the proposed merger between the two Class I railroads, 

Canadian Pacific Railway (CP) and Kansas City Southern Railway (KCS). USDA continues not 

to take a final position on the merits of the merger application, and based on recent comments,

USDA also continues to urge the Board to carefully review the application for any potential 

effects on competition and service—with a particular focus on those concerns raised in a number 

of shipper comments. In addition, as recommended in USDA’s February 28 letter, the Board 

should still require the applicants to submit a Service Assurance Plan, especially in light of 

ongoing service problems. Such a plan would help avoid the significant service disruptions that 

have often accompanied past mergers. There is simply no room in the current operating 

environment for additional service disruptions.

USDA shares the concerns expressed by the American Chemistry Council, Bayer CropScience, 

and other chemical shippers over CP’s tariff language regarding toxic inhalation hazards (TIH).

Many of these chemicals are an essential part of the U.S. agriculture and food supply chain. 
Upon review, USDA agrees with the chemical shippers that the CP’s tariff language places a 

significantly higher burden on TIH shippers than the does KCS’s tariff language. CP requires 

TIH shippers to purchase $100 million worth of liability insurance and to include CP as an 

insured party, seemingly buying insurance for CP. CP does accept liability for its own negligence 

or willful misconduct, as well as acts for which CP is jointly liable with the shipper. However, 

the railroad leaves the shipper responsible for any other liabilities—presumably, including acts 

of God and third-party actions outside a shipper’s control. Shippers should be responsible only 

for the conditions they can control. Once a car leaves a shipper’s hands, the railroad bears 

responsibility for safely stewarding it. 

To address the TIH issue, USDA urges the Board to take two steps: first, as a condition of 

approving the CP-KCS application (if it is to be approved), USDA encourages the Board to 

require KCS to retain its tariff language from before the merger. The old KCS language should 

govern traffic originating on, terminating on, or traversing the KCS network. That is, at 

minimum, the merger should not harm current KCS customers by subjecting them to CP’s more 

burdensome tariff language. Additionally, USDA encourages the Board to investigate CP’s tariff 

language itself. The Board needs to delineate how much liability railroads can shift to shippers 

while still allowing railroads to meet their common carrier obligation. 

In closing, USDA re-emphasizes there is simply no additional tolerance in the current operating 

environment for more service disruptions. Historically, even in the best of times, merger 

approvals have resulted in significant and debilitating service failures to agricultural shippers in 

the transitional period following the mergers. Given the extreme ongoing issues with rail service

disruptions, these are by no means the best of times for rail transportation or supply chains, in 

general. In light of these issues, if the merger is to be approved, USDA would strongly urge the 

Board to do everything in its power to ensure no additional service disruptions result. USDA 

appreciates the Board’s consideration of these points, as well as those raised in the initial round 

of comments.

Sincerely,

Jennifer Moffitt

Under Secretary

Marketing and Regulatory Programs
CERTIFICATE OF SERVICE

I, Adam Sparger, certify that on this 22nd day of April, 2022, a copy of the foregoing 

document has been electronically filed via the STB’s e-filing system and served by

electronic mail on all parties of record in STB Docket Number FD 36500.

Adam Sparger

Director

Transportation Services Division

U.S. Department of Agriculture

Washington, D.C. 20250