b'APRIL 5 - 18, 2021NORTH AMERICAS TRANSPORTATION & LOGIS TICS NEWSPAPER 19I NTERMODAL& L OGISTICSN EWSCP Rails CEO makes the $25 billion dealA (virtual) test ride in a his mentor wouldntCanadianPacificRailwaysLtd.stold analysts on a recent call. Waymo long-haul truckKeith Creel for years followed in the foot-steps of his mentor, Hunter Harrison, ant hen extS Pike InPhoenixrecently,ababyblueThetruckseemedtohandlelane industry legend whose revolutionary effi- Railroads are central to the history ofPeterbilt truck pulled onto a westboundchanges and merges smoothly. Cars fre-ciency strategy became the standard at allNorth Americas industrial development,lane of Interstate 10 southeast of the city.quently whipped past on both sides. At the major North American railroads. andindustryloreisalmostalwaystoldAt the wheel was an autonomous spe- one point, the truck switched to the middle Now, the protege has a good shot atfrom the East looking West: A Goldencialist,asAlphabetInc.sself-drivinglane after detecting a vehicle stopped on achievingamajormergersomethingSpikeunitedthefirsttranscontinentalvehicleunitWaymocallshim,namedthe shoulder ahead.that Harrison, who died in late 2017 atrailroadintheU.S.in1869;theLastDave. A few seconds after merging ontoWhen it came time to change direc-age 73 during a turnaround effort at CSXSpike did the same in Canada in 1885. the interstate, Dave released his grip ontion on the 202, which required getting Corp., couldnt after several failed tries. Some 150 years later, Creel is writingthewheelandletthetruckbegindriv- off the freeway and making two left turns CanadianPacifichasagreedtobuya North-South story. ingitself.Withthepandemiclimitingon surface streets, Dave took control back Kansas City Southern for $25 billion, cre- Thetie-upwouldcreatea20,000- in-personreporting,Waymooffereditsfrom the autonomous system. Were not ating the first railroad to traverse Canada,mile, T-shaped network, giving Canadianfirst long-haul trucking demonstration forcurrentlydrivingautonomouslyonsur-the U.S. and Mexico. If Creel, the Cana- Pacific access to Kansas City Southernsjournalists virtually.face streets, said Abad.dian railroads 52-year-old chief executivesprawling Midwestern rail systm that con- Im definitely looking forward to theWaymo has been testing heavy duty officer,cancompletethedealnextyearnects farms in Kansas and Missouri to portstime when we can do this in person again,trucks since 2017 and currently has them as he envisions, it may very well be thealongtheGulfofMexico. ThenetworksaidPabloAbad,productmanagerforonroadsinArizona,California,New last chapter in a rail merger saga that wasWaymos trucking division Via. TogetherMexico and Texas. The company, when kicked off by deregulation in 1980s andwithplanningandbehaviorengineeringasked by email, declined to disclose how was credited with saving a dying industry. lead Brad Neuman, Abad narrated as themany trucks are in its testing fleet or how Thisistheonlymergerleftthatrobot driver hauled a trailer for about 15manymilestheyhavecoveredtodate. could potentially be a stabilizing one andmiles along I-10 and Route 202. Last year, Waymo signed an agreement not a destabilizing one, said Tony Hatch,Since 2010, when John Markoff ofwith Daimler AGs trucking division to a rail industry consultant. This is one thatthe New York Times first rode in one ofbeginequippingFreightlinerCascadia takes Kansas City Southern out of playGoogles self-driving carsyears beforetruckswithitsfifth-generationautono-and combines the two smallest railroads. the name changed to Waymothe jour- mous driving system. Todays demo used The timing follows a global pandemicnalistdemohasbecomearitualinthea Peterbilt truck equipped with the fourth-that made companies rethink the risk ofindustry. I did one two years ago, in onegeneration Waymo Driver, a system that having overseas supply lines. The supplyof Waymos Chrysler Pacifica minivansincludes more than a dozen cameras, radar chain was frozen by Chinas initial lock- in Chandler, Arizona. They are fun, butand three different types of light detection down last year to control the coronavirus,Keith Creel, CEO of CP Railways of limited value. A demo can verify thatand ranging, or lidar sensors, including a and the subsequent re-opening has createda technology is not vaporware, that therelong-range variety that can detect objects a maritime logjam at U.S. ports. A cloudwould also let CP reach deep into Mexico,is a car somewhere with a steering wheelup to three football fields away.over trade was lifted in July with a renego- which made up almost half of Kansas Citythat moves on its own. And it provides aWaymo has not set a target publicly for tiated trade pact among Canada, the U.S.Southerns revenue last year, and benefitchancetoassessperformance:Canthewhen a commercial product will be ready. and Mexico, while President Joe Biden isfrom the 16 different automotive factoriescarchangelanesintrafficormakeanWere looking at driving out within the seen as less likely to issue trade threats byalong its tracks there. unprotected left? Is it smooth or jerky?next few years or so, said Abad, during Twitter than predecessor Donald Trump. Under terms of the dealthe biggestThere is also a subjective element: Doesavideoconferenceafterthedemo.The The stars have aligned to make thisCanadianpurchaseofaU.S.assetsincethe ride feel terrifying or routine? (For arollout, he added, would be gradual, as it deal happen, Creel, an Alabaman who2016Kansas City Southern investors willgood example of the former, read Ashleehas been for the ride-hailing service, and followedHarrisontothreecompanies,(DEALcontinued on page 23) Vances 2015 ride with George Hotz, whowould begin in the southwestern states: declared mid-ride, Dude, the first timeAutonomous trucking is not going to be it worked was this morning.) But theselike a light switch that suddenly flips and Blockbuster CP-KCS rail mergeraccounts dont add up to data, and the gapall of a sudden now we have autonomous betweenready-for-a-demoandready- trucks on the road where previously we for-commercial-use is wide. In Waymosdidnt the day before. The company, he faces lengthy regulatory journey case, a decade passed between Markoffssaid, was still considering its best paths first ride and the launch of a fully driver- to market and was open to using a depot-Canadian Pacific Railway agreementIn the U.S. and it operates from north toless ride-hailing service last year. to-depot system, where local drivers take to buy Kansas City Southern faces a longsouth,diminishingconcernsaboutdis- So what can be gleaned from a virtualover at freeway off-ramps to handle the journey to win regulatory approval fromplacing competitors east-to-west service,self-driving truck demo?last miles on surface streets.a powerful federal agency that has man- Miller said. TrafficwaslightandtheweatherWhile highways offer a more struc-agedtodiscourageconsolidationintheUnlike some other potential merg- sunny. In the passenger seat next to Dave,turedenvironment,asNeumancalled industrywithtime-consumingreviewsers where you think that is never goingacrossaplexiglassbarrier,satanotherit, than city streets, trucking comes with and stringent merger rules. to happen, I think this one will be givenspecialist, Drew, with a laptop open. Bothitsownpeculiarchallenges.Stopping While the Justice Department or Fed- very serious consideration, Miller said. wore face masks. Dave kept both hands80,000poundsoffreightwhensome-eralTradeCommissionreviewmergersMichael Booth, a spokesman for thewithinacoupleinchesofthesteeringthing goes wrong at 65 miles per hour, in other industries, railroad combinationsboard, said there is no set time for com- wheel at all times. for instance, is not a problem that ride-must clear the five-person U.S. Surfacepletion of the review but filings for theCarsandtruckontheroadaroundhail vehicles have to handle. The compa-Transportation Board. merger had not yet been submitted. were framed in green and purple boxes onnys trucks, said Neuman, are designed TheyhavetotalauthorityoverEachcasehasitsowncomplexi- the data visualization system that was onto have different responses depending on makingthedecisionoverwhetherthisties, Booth said. It runs a lot like a courtscreen along with a camera view of thethe situation, including pulling over onto goesforward,saidDebMiller,whocase. The railroads have to put in a filingroad ahead and a live shot of the insidetheshoulderorcontinuingtothenext servedasamemberoftheboarduntilfor the purchase and well have to reviewof the cab. exit at reduced speed.2018. I think this will get a very long andthat. People will probably have a ton to hard look from the board. say, and well have to review that. There WhileCanadianPacificsaidinawill be several public comment periods.statement it expected board approval forTheboardisthesuccessortothe the $25 billion deal sometime in 2022, itsInterstate Commerce Commission, which a process that could take years instead ofwas disbanded by Congress in 1995. It is months, said Miller, who currently servesempowered to protect service reliability as director of the University of Kansasand settle disputes between shippers and Public Management Center. railroads.BoardmembersareSenate-A potential merger the board consid- confirmedandservefive-yearterms. ered between Norfolk Southern Corp. andThe panel is currently made up of three Canadian Pacific was withdrawn in 2016Republicans and two Democrats.amidconcernfromotherrailroadsandItsnotgoingtobequick,said shippers, Miller said. Larry Mann, a rail safety expert with the Miller predicted this deal would havelaw firm Alper & Mann.better luck. Kansas City Southern is oneCanadianPacificannouncedthe of the smallest Class I railroads, whichdeal to buy Kansas City Southern, creat-is defined by the board as rail lines withing the first railroad to traverse Canada, a 2019 revenue of at least $504 million.(JOURNEYcontinued on page 23) The baby blue Peterbilt truck used for Waymos automonous test ride.'