2 plus 2 becomes 5 when you put these 2 networks together. We're going to start off with some prepared remarks. I'm going to hand over to Paul to provide the necessary disclosures, then we'll go through the slides and at the end we'll do a Q and A. We have the ability to take your questions through a pigeonhole link if you're Bernstein client or you can email me directly and I will try to work that in. With that, Paul, I'll hand it over to you.
Well, thank you, David. So before I begin, I'd like to draw your attention to the forward looking statements and additional legal information, which are available at the beginning of the presentation. So as a reminder, today's conference call contains certain projections and other forward looking statements within the meaning of the U. S. And Canadian Securities Law.
These statements are subject to risk and uncertainty that may cause actual results to differ materially from those expressed or implied in these statements and are fully described in our cautionary statement regarding forward looking statements in our presentation. For more information about CN's superior proposal to combine with KCS, please visit www.connectedcontinent.com. I would now like to turn it over to JJ, our President and CEO.
Well, thank you, everyone, and thank you for attending this commercial session today. I'm joined with Doug McDonnell, our Senior Vice President of Special Projects, We appreciate the time you're giving us to talk about the commercial opportunities a combined C and KCS would create for our customers and our 2 great freight railroad. It's been almost 2 weeks since we have been engaged with KCS. And while there's still work to be done, our interaction with KCS has made us more excited about the opportunities that a combined CN and KCS network could bring to our customers and other stakeholders. There are 4 key messages I would like to leave with you today regarding the winning CN and KCS combination.
First, the combination of CN and KCS would create the premier railway of the 21st centuries, connecting ports in the United States, Mexico and Canada, allowing our customers to move their products seamlessly across the continent and expanding North American trade and economic prosperity. 2nd, CN and KCS together would enhance our customers' value proposition, service offering and customer choice with greater access to port and terminal, more riding option and greater efficiencies. 3rd, I want to reaffirm and reiterate the high degree of confidence that we have in our prior estimate of US1 $1, 000, 000, 000 in EBITDA synergies. To note, everything mentioned and shown in the presentation today are synergies in U. S.
Funds, And the vast majority of our expected synergies will come from converting truck traffic to more efficient, cost effective and environmentally responsible asphalt or rail service. 4th, our recent discussion with KCS have been very constructive. Our continued conversations with KCS have helped us identify additional opportunities going beyond our internal and turn initial conservative assessment going beyond our initial conservative assessment, which was done purely on publicly available information. We're still in early stage of assessing the synergies, so we are not ready to update our estimate, but I and my team are very excited about the potential opportunities of our combined platform. Between Doug and I today, our goal is to paint a clear picture for you of some concrete example of case studies of the potential of a connected continent network across USMCA, which would that would bring to our customers and our stakeholders.
Let's go on Page 5. Our combined network would offer more option, greater choice for customers to pursue new opportunities and develop new markets to optimize their freight ROI. By combining together as 1 integrated network and by combining our talent and expertise, we believe we will be able to deliver superior service quality, improve efficiency and add product and services offering like the domestic repositioning of overseas boxes, retail door to door product and refrigerated cargo pool services. We will also give some specific examples shortly to illustrate what that means in terms of rental model, but also carload opportunities. The CNKCS combination will also provide our customers with more network access to seaports and river terminal and offer unmatched network resiliency across all seasonal and weather condition from Texas to the Midwest.
Together, we will be able to offer access to 33 Class 1 gateways, 16 Ocean Port and 16 River Barge Terminal, thus allowing us to connect the U. S. Industrial core to more port cluster than ever before and offer new improved export option for customers. We are also committed to making significant infrastructure investment in key communities across the new combined network, including Illinois, Missouri, Michigan, Louisiana and Texas. That means more economic opportunities and more jobs.
Ultimately, the introduction of this unique new express route that connect Mexico and Canada will drive reduction in the carbon footprint of the thousands of trucks that heads up up and down the I-thirty 5, I-fifty 5 and I-ninety 4 every day between the Midwest and Mexico and Texas. On Page 6, before we go into more detail around the market opportunities for this combination with Brink, I'd like spend a couple of minutes on the CND and A and the evolution and progress that we've made over the last 2 decades. We are a pioneer of the first railroad to implement precision schedule railroading, which resulted in significant OR improvements. Since we a foundation of being able to operate our network efficiently, we built on top of that foundation to expand the fast growing anti roll segment, which shifted our overall book of business mix and enhanced our growth profile. In recent years, we have been focused on technology investment to continue to improve efficiency, safety and margin.
These technology investments are front end loaded, but the effect of the efficiencies they deliver will help us in the long term in our margin trajectory. During this time period, our share price has also experienced significant growth and we continue to invest in technology to drive the next leg of operational efficiencies and top line expansion. Post the CNKCS combination, we will continue to have a growth mindset, which will be supplemented by the new end to end superior direct route connecting Canada and the U. S. Midwest, Louisiana, Texas Gulf and Mexico.
On Page 7, taking a deep dive into the $6, 000, 000, 000 of additional intermodal total accessible market that we've talked about 2 weeks ago, this combination would further reinforce our strength and track record of growing in intermodal and create the premier 21st century USMCA intermodal service provider. Together with KCS, we would be able to improve existing service offering as well as add additional service. Our combination will create new end to end direct routing option that do not exist today. We would directly connect big cities of counties in the U. S.
Midwest with supplies of Mexico that can only be accessed today with multiple combination. Our end to end direct routing option complement and compete with existing multiline route that will remain available to customers faster, more consistent single line service, reduced costs and economically open up new markets that are currently cost prohibitive in some cases. Our customers would gain tremendously from single line operator network by creating the speed, cost and reliability needed to connect the continent and display some of the international import. We would provide fluid border crossing north and south and represent in 1 stop shop for our buyers and sellers. On Page 8, At this stage on this page and the next, I want to give some example of the opportunity that we have identified beyond the $6, 000, 000, 000 of intermodal TAM.
There are meaningful and new benefits that the CN KCS combination would bring to this end to end recourse network, With rail lines serving different markets that are hundreds of miles apart, the combined CNKCS would offer unmatched routing resiliency to mitigate the impact of port congestions and weather related disruption. The combination would also efficiently link the U. S. Industrial core in the Middle America with multiple deepwater ports, offering a seamless connection to international market. We will apply our to attract more ocean shipping line and the alliance to call on the Mexican port.
We have a proven track record of not only doing it in Rupert, but also in all other port ecosystem and communities that we serve across our existing network. The combination of CN and KCS on Page 9 would also provide many export matchback opportunities. Together, ocean carriers would be matched with North American producers to load empty import containers with export product. We can leverage our access to container transport partners through Ottawa network to facilitate and enable these export from any of the 3 coasts. In this matter, we will be able to help our export with favorable return economics, putting together the balanced model for the Ocean Line carrier by establishing an export or DRP model to help make them make their round trip economics work better and a win win situation for them, for the shipping line and for the exporters and importers.
I will now ask Doug McDonald to talk more about the detail of several of our callout synergies opportunity, which starts on Page 10. Doug?
Thank you, J. J. So on Page 10, here I'm going to lay out a few specific examples of the rail synergies that we expect to realize with this combination. So between the U. S, Midwest and Eastern Canada, to and from Texas and Louisiana, petroleum chemicals that are currently moving by rail would now have a single line option for customers.
Some of these markets will be 2 to 3 railways in the routing today, where it can now be CN Direct. In other markets, CN will provide a new competitive option to other rail carriers. As an example, a Midwest surfactants producer whose product is used in the production of detergents has had a difficult time penetrating the growing Mexico market due to transportation costs and inefficiencies. A new direct route to Mexico from their plant in Illinois will position them for success. Between the U.
S. Midwest to and from the Kansas City area, grain products are currently moving by rail. This new demand area would now be open to our shippers on CN and that have always needed 2 line routings before. Our customers would now have a competitive single line option to these markets for cereal grains, fertilizers and other grain products. When looking at Western Canada to and from the KCS network and Texas and Louisiana, forest products are currently moving on a routing that has 2 or 3 carriers in it.
Centimeters would be able to provide a single line service to major lumber and OSB shippers to 1 of the largest U. S. Markets. And lastly, on this page, the aluminum opportunity the growing markets. With the USMCA agreement moving more supply to North America, Quebec's low cost aluminum is uniquely positioned to supply this market.
This market will have the potential to be a totally new supply chain over the next 2 to 3 years. Overall, as we've talked about before, we are looking to target $2, 000, 000, 000 in incremental potential rail opportunities as a result of this combination. On Page 11, I wanted to do a little bit deeper dive showing the given importance of grain to our network. Notably, the combination would bring together the KCS destination market and the CN Origination market for grain. The KCS network has access to a large feed market in Texas, Mississippi, Arkansas and Oklahoma, which you can see on the map in the shaded area.
Together, CN has a large origin franchise with customers in grain processors in Illinois, Iowa and Wisconsin. Together, this would represent a perfect match for both sides. Southern feed mills will get to enjoy the benefits of a connected network such as a more competitive single line haul origination network for corn and soybean meal. Additionally, grain shippers will be able to enjoy direct access to Gulf Coast export terminals and facilities as well as barge loading facilities along the river network. Further incremental opportunity could also be attained by bringing CN's approach to containerized export grain to the KCS origination base.
The CN KCS combination would create enhanced optionality for grain shippers and processors. The estimated revenue opportunities in grain resulting from the stronger combined franchise would represent between $130, 000, 000 $230, 000, 000 annually. With that, I'll turn it back to JJ to provide some closing remarks.
Well, thank you, Doug. And to wrap this up, the combination of CN and KCS will be transformative to the benefit of both companies' customers, communities and shareholders, transformative to our shared long term success. KCS is the ideal partner for us at the right time, offering highly complementary strategic benefit to the combined company that will result in meaningful network expansion, cost synergies, ESG driven growth opportunities and the premier Canada U. S.-Mexico railway of the 21st century. We are confident that the financial and economic benefit of the CN KCS combination are unmatched by any other potential transaction that KCS may consider.
With that, I will turn it back to you, David, to lead the Q and A.
Great, guys. Thanks for taking the time to walk us through the slideshow there. I wanted to kind of start with a big picture question. I know you mentioned that you're not going to be updating your synergy numbers today. But I'm just wondering, as you guys are talking more to the KCS team and getting access to some of the waybill data, Can you give us some view of how your perception of the opportunity here is changing, whether that's the size and the magnitude, confidence in the execution, challenges that may come from that your perception of the challenges that are going to be required to overcome to kind of unlock some of this new business opportunity?
Doug, you want to pick that up on the synergies? Yes, sure, David. So I've been involved
in this, I think, for just about a year now. And so we've gone through a lot of it, but we are more confident than ever about our ability to achieve the $1, 000, 000, 000 of synergies we announced 2 weeks ago. So you've heard us say that this combination is about growth and it's just that. We talked a lot about the growth opportunity from Intermodal, but today we wanted to share more context for the other carload opportunities in front of us in grain and automotive, forest products and other markets. So 2 examples that we could see are examples for direct access to Iowa ethanol producers to Texas refineries in Mexico as well as new access to the St.
Louis barge system and Mexico for DDGs, so dried distillage grains, will generate significant new carload volume on the combined CA and KCS network. We're also seeing some excitement for the transaction and in the fuels market and propane customers in Sarnia, Alberta and the Joliet area to run unit trains or block volumes from multiple origins into the growing Mexican market. The vast multiple origins served directly by CN are the key. Only a CN KCS combination allows so many fuels and propane customers direct line routing from multiple discrete origins, allowing market arbitrage opportunities. And we're going to continue to engage with the KCS on our due diligence and being 1 of the people that we are in it, we get to see some of the KCS information.
They have a wonderful franchise destination market for fuel, so it works out really well.
Yes, maybe David, I could add it. The $8, 000, 000, 000 of total accessible market potential that we talked about 2 weeks ago was based on the market size of today, did not include any benefit from the USMCA growth and it does not include any benefit from the near shoring potential, which both of them obviously are real as well.
Okay. And if we think about that $8, 000, 000, 000 opportunity and recognizing that it's not been adjusted up for MCA growth and we think about the 4 areas of opportunity you've identified on Slide 8, is there a way to think about how that $8, 000, 000, 000 sort of would be divided across those 4 different market opportunities there?
You want to you've done some that work in detail, Doug. You want to talk about these sort of maybe geographic split broadly speaking?
Yes. So we're not going to be breaking up the $8, 000, 000, 000 specifically, David, but I'll tell you how it works. A lot of the math works around population center to population center. So we've noticed and we were working on key geographic areas. So we'll say the Detroit and Toronto markets going into large destination markets of population like Mexico and Dallas.
And we see those numbers just like we see the Chicago market, which is obviously much more competitive into the Mexico and Texas market. And then we'll see other smaller markets like we talked about Western Canada into the Dallas market. So we're really watching the population center to population center and that's how it will split up. I could say the same for Kansas City. It's a great population base and that's why it's 1 of our key projects is to look at moving a lot more intermodal between Eastern Canada, Detroit into the Kansas City
market. Okay. So more population weighted than anything else. And if you think about the opportunity or demand lock here, obviously, carload versus intermodal, is there when you think about the new trade flows that are going to be created here, right, like I don't think there's a ton of transatlantic container volume coming in through the Canadian ports to reach Kansas City today. I would think of that as like a new routing potential.
Is there a way to think about that incremental opportunity from diversion of existing sort of truck or rail traffic versus this notion of kind of creating a new trade flow?
Yes. If you look at the back in the slide on Page 8 is to help you understand that vision. Today, CN network and the other net basically all the Eastern network basically is top in Chicago. So if you're in Kansas City, but also even in St. Louis, Westside of Mississippi, you do not have access to the trade on the Atlantic side by combining CN and KCS upgrading the rail line between Gilman, Illinois and Kansas City.
Kansas City would be directly connected to the Port of Montreal, the Port of Halifax and potentially the Port of Quebec City and be connected with the East Coast trade, not only for import, but also for export. So they would have direct single line service to the East Coast trade. And some of that business might be conversion competing with more Southern U. S. Port with U.
S. East Coast Railroad. And same thing, Kansas City also will now be connected, maybe better connected, more seamlessly connected with a port of Mobile, a port of New Orleans, and obviously will now also be connected with a port of Prince Rupert and a port of Vancouver. So what you have is in the Middle America, the Middle America is typically either connected to 1 coast or the other coast, not both. Only Chicago is connected to all 3 coasts.
The combination we're putting together would really bring in Mobile and New Orleans in play for all of these Midwest, Mid America cities. Montreal Halifax would come also a player on all these Mid America cities and the influence of Rupert might go even more south than it is today. So from a port business point of view, these products don't exist today. And our partner is a container operator and the terminal operator of these 3 coasts. Are really excited about working with CN to have to increase their zone of influence.
And the same thing could be said for Lazaro, Cardenas and Veracruz. 1 of our partners, the Hutchison Port, who we work in Quebec City for the last 2 years, actually own and operate container terminal in Veracruz and Lazaro and it's quite exciting to see what we could do with CN, CN, KCS combination to expand their zone of influence. In that case, they'd like to have a zone influence that would reach into the southern part of Texas, namely Houston.
Okay. And maybe if we think about that notion of sort of this creating a new route versus the intermodal side, can we talk a little bit about timing, right? I mean, we've you sort of oriented us around an $8, 000, 000, 000 number with some potential upside of the revenue to the extent that MCA drives sort of new things like Quebec aluminum into Mexico. But as you think about the challenge of opening up these new lanes or driving highway conversion? Like what's the rate at which you think you can kind of tap into that opportunity from the day you get control of the network?
Yes. So from the day that the voting trust would be approved and the shareholders of KCS would vote in our favor, so we can buy the company but put it in trust. Now we will not control what the KCS does, but we could start working directly with customers and terminal operators to try to prepare the vision that we will be able to roll out in late 2022. So we can work with terminal operator in Mexico, not so much that we can implement highly work with KCS, but we can definitely put the groundwork of how we would market our product to the ocean shipping line, do the pre marketing of the proposed product and work in that front. I think the same thing on Carlo, Doug, we could also work with a number of the green producers located both on CN and KCS and start to really get their mind around what kind of product we would offer them in terms of terms of, for example, accessing grain in the upper Mississippi for barge network.
Same thing with aluminum producers in Quebec, start to get them their mind around how they would better access the part producer in Mexico with the aluminum grade, etcetera, etcetera. So maybe, Doug, you want to talk about some of the pre marketing we could do with many of these producers ahead of the controlling the combination just as pre marketing and getting them predisposed to where they would want to take a bigger role post integration.
Yes. Thanks, JJ. In a lot of times, our customers need time to develop their markets or develop their sales. So it takes a lot of work and we can do that while the company is in trust. We would work as an example for our lumber producers on how they would access deeper into the KCS network over time that would allow them to position either new receivers to be able to sell into that as well as to have a new product.
So the same could be said for pulp, but another great article is like steel. So we have a large steel franchise on CN that we have some really great customers that produce high strength steel for the automotive industry that would love to be able to have single line service down into Mexico today to the production sites. So that's an obviously opportunity we'd have to work with them around, will they want to sell down there, how could we look at working with them to move it down cost efficiently? Some of these require transloads near destination that we would have to look at developing with them. So each 1 of our customer areas and would need to have specific plans put in place.
It takes time to develop, but I'm sure we can get it done very quickly and be ready for when we would actually be able to look at taking over.
That's right. So we will take the time between the voting trust and the STB final approval to do the pre marketing with all of these buyers and sellers and have them focus on the benefit of exploiting this new supply chain logistics.
So and I'd love to kind of maybe just distill that down, right? As analysts, we're going to at some point have to put these numbers into a spreadsheet. If you get that from change of control being sort of day 0, is this 2 years, 3 years, 5 years? Like can you give us some directional sort of indication about when you think these markets will this market opportunity will be fully accessible? Like roughly directionally anyway, how long will it take to kind of unlock this opportunity?
Yes. It might be a little too early to have a definite view on where because we're still doing the due diligence on some of these opportunities. And I think it'd be fair to expect a seasoning period as we start the integration of the 2 company and the 2 business plan, and we're targeting to do that hopefully with the STB by the second half of 20 22. But at the same time, the time that we talked about the $8, 000, 000 of total accessible market was based on the market as exists today without really adding in the benefit of near shoring, without really adding in off strong with the USMCAV, without adding in our port strategy, especially as it relates to the Mid America destination, importexport as well as what could be done in Mexico with our partners. So I think there's a lot of puts and takes and our vision here is to always have as many playing cards as possible so that if something takes more time to deploy that we would have other things that would come on top of that.
And I think the proof of that would be our track record on our 2010 2020, so how CN has been able to increase our top line, mostly in that model port business, but also in carload. And then there's other things that we haven't really talked about so much, but that Doug has been working on through the due diligence, including grain and crude, and there might be some other things that we can rely on as part of the combination. Doug, you may, you want to add to that?
Yes. Thanks, JJ. So like as an example, so grain, there's a great growing market into with corn moving into the Mexico market today. That will now give CN's customers great access into that market, which right now is a 2 or 3 line haul for us. So we expect that and that really goes into the fructose or the corn syrup market that goes into soft drinks.
So that would be a new market for CN. We would be providing a great competitive alternative to the other people supplying corn in there. You look at other products as well. There is a crude market today that moves down into the Louisiana Gulf and Centimeters would be very happy to participate in that. We're not saying it's going to be single line.
We would be very happy to take that product over an open gateway like Kansas City. And we think we can continue to make that competitive and build that volume. Also within Mexico itself, it is a large growing refined products market. And it's seen significant growth today out of the Gulf Coast with KCS. And we think we can add some volumes into that from CN's origination customers that have refineries both in Louisiana, but all the way up into Chicago to to be specific that we haven't really factored in that much into the synergies overall, but we know they're there and they will definitely help contribute to it.
Yes. So there is 1 specific aspect, David, is as we are layering all these different opportunities, some we had in our original TAM, some are newer as a result of recent work as well as the progress on the due diligence, We are very confident about the and we had a conservative approach to how to quantify the synergies and the work done since then, including the diligence, which is still in progress, obviously, just making us even more confident by the day that we're seeing that the TAM is actually all there and is actually a good amount of opportunity we can convert, not just the 1 that we had in our base business case, but maybe some others that we will quantify here in the weeks to come.
So you guys had a relatively unique perspective on this having kind of developed Prince Rupert from a fishing port into an intermodal gateway and pathway to China. As you think about the lessons learned from opening up Rupert, how is that experience similar, the same, like what do you think that experience experience does for you in terms of your ability to open up these opportunities?
The opportunity is real. In our recent discussion with Hutchison, their terminal operation in Veracruz and Lazaro, Lazaro namely, they're not running at capacity. They have a lot of excess capacity available. And the zone of influence right now is mostly domestic within Mexico, probably as you know, kind of by the time you get to City after that, the amount of business they go beyond and North Mexico is limited. So they're really looking for ways to create a model that's a rail friendly model, big ship, big train model that it could eventually create with us some destination train in market, which today they're not participating.
Now they had a challenge here because of the teachers' strike, which has really hampered the success of the rail operation of that port, but they want to pick it up to kind of where they used to be and really see if in working with CN, we can create a seamless border crossing in Laredo the same way as we have a seamless border crossing in Sarnia, Ontario or in Rainier, Minnesota, where really we've put the infrastructure and the process in place such that a more northern port can actually be even as effective, if not more effective than 1 of the southern ports. So definitely and the same thing in New Orleans and Mobile. Both of them are a big ambition. New Orleans is going to have dredging done by the U. S.
Corps of Engineers. They have a project to build a brand new state of the art container terminal within the next 5 years. In order for this project and same thing for Mobile, in order for this project to be successful financially, they need a railroad. They need a railroad to get them to places beyond than what truck can do, and the railroad can do that cost effectively. And that's where the zone of influence in the Oldie and Mobile should go all the way to Detroit, Indianapolis, Chicago, Kansas City, St.
Louis. And that's what they see in our proposed merger. In the case of the Mexican port, what they see in our proposed merger is the potential to be able to be a player of importance in the import of what Texas import from Asia as well as some of the exports of plastics of Texas back to Asia via those gateways. So we have partners who are keen to actually work with us to create top line growth for their benefit, our benefit the benefit of people who import and export as extra choices in the cluster that we just talked about.
So we talked a lot about the port operators and the partnerships, the steamships for some of the international trade opportunities. But when you think about the more sort of moves in domestic equipment, like the channel partners that you would traditionally work with, Have you had any preliminary discussions with them about these opportunities and what their perspective is on how the change in rail service that we're proposing here is going to impact their ability to market the service as well?
So I'm assuming you're referring to more like domestic intermodal, domestic movement of container?
Yes. Well, so you're talking about like sort of Prince Rupert and Lazaro and Port of New Orleans, Mobile. But I understand there's also a lot of sort of truck conversion in this. And I'm just trying to get a sense for what conversations you may have had with intermodal channel partners on unlocking some of this and their sort of appetite or their interest in the change in the rail network that would and how that would impact their business outlook?
Yes. So definitely, the single line 1 stop shop customer service rail network that we're talking about will change the way business is done over time within this next decade. Today, if you go if you do some USMCA trade, you would probably start either a truck in Mexico, get to the border and then get into Midwest and Canada by truck, which is a very long haul, or you would start with the KCSM, get to the border and then connect with UPOBN, get off the rail network in Chicago and then truck beyond to Michigan or Ontario or Point, which may be more a little more north like Minneapolis. So what we're proposing to do is to run this as 1, a rail a netable network that will start in Mexico City and then that would basically go all the way to Toronto and Detroit and places like Minneapolis or even Calgary. So you would want just 1 railroad destination train.
You may not have service to all of these cities every day, but you want to have blocks of train big enough that you can really run them long, double stack, low cost, minimum number of stop, maybe 2 destination per train. So you can really compete and provide a product which would transform how the marketplace is done. So we've had quite a bit of discussion with either wholesaler, Canadian and U. S. As well as people who are I mean, IMC, who are in that business today and who would love to be able to be even stronger position in that business by converting some of their freight to rail and some of their freight to single haul rail, where the extent of the rail journey is actually more fulsome.
It doesn't start and reduce the amount of trucking they would have to do, especially beyond Chicago. So the Canadian side, you've seen some of them actually support letter of support. On the U. S. Side, people are more mindful of they're doing this with all the railroads.
So they're very positive with us. They're hoping that we can actually put have reached an agreement with KCS in a boarding trust, at which time they will become more vocal about their support. But everybody sees that this product over time would create a more cost competitive single point of contact customer service that over time, we're already gaining traction in displacing some of the existing freight of today that's either moving on the road or combination of rail and truck.
And as we think about that 53 foot sort of domestic high cube box that we're envisioning going sort of cross border Mexico up into the upper Midwest, when you envision talking to customers about this, is this a 1 day savings in transit, 2 day savings in transit versus what's available now? Is it more about transit reliability or service frequency? Like can you kind of like make it a little more tangible in terms of when you go to market, this single line service will either be faster, more frequent, more reliable? Like how do we quantify that, the attractiveness of that opportunity versus what's already existing in the market today?
Yes. So, if you those of you who are looking in the slide, if you go back to Slide 7, you look at these commodities, they're not commodities which require super speed like berries or things which are quickly appreciable. They're more things that are required. They require lower costs. Can we make it cheaper to move auto parts, electronics, furniture, frozen French fries?
Can we make it cheaper to access the market? Can we make it a little more consistent than the existing train ride, combination truck and train ride that they have today. And then reducing the amount of time where they have to rely on premium trucking to actually make the delivery hit the delivery window they committed to these to the buyers. So lower costs, more predictable, maybe still using the highway from time to time, but really diminishing the number of times where they would have to use on the recovery truck to make delivery window they would have committed to the buyer. But we're not talking about moving avocado or berries, but we're talking about moving frozen product, we're talking about stuff that has a bit of a more shelf life like garlics or carrot in, for example, in the temperature protected service.
And there's a lot of product that moves back and forth in temperature protected service, whether it's frozen protein, we talked about French fries, a lot of them come from Eastern Canada and Manitoba. And then on the reverse strip, a lot of food which has been processed or food which is processed and packaged that requires temperature control either against the excess heat or temperature control against, you know, frozen in transit in the winter months. So significant trade that exists today that has to do with what each country does best and also the fact that Mexico has a good labor cost base obviously and huge potential. The market today is underserved in of the quality of the service and the cost of service because the service is fragmented between 2 railroads and a truck journey And that in itself is something that we want to overcome by providing a point to point door to door service with minimizing the length of the structure in the output end.
Okay. Can we talk a little bit about what kind of investments you're going to need to make to open up the synergy potential? As you look across the connections and you start thinking about these different trade flows that you're looking at, like what can you update us on what you're thinking is in terms of investment requirements here?
So Doug, you want to talk about some of the investment that we've looked at?
Yes. So thanks. The biggest investment we would have to make would be actually be into the Gilman or I'll say Chicago to Kansas City corridor for people. So that's going to require some track upgrades and we estimate that to be around $250, 000, 000 So that's the single biggest investment we see to put in the new product and service that we see as a big growing market for CN. So we also have plans to do some other investments both in Illinois, Missouri, Michigan, Louisiana and Texas, And those will be small additional infrastructure investments, but we're not ready to really put those out in detail, right, as we go through the due diligence.
So we're still in the very preliminary stages of evaluating it. I have seen some of the KCS plans for what their investment is, and it's very solid, and I think it will dovetail greatly for a combined network. And maybe Doug, you
should we talk quite a bit about intermodal, but maybe you can also talk about carload and especially as it relates to the Kansas City gateway that we commit and pledge to keep Ray open. And in fact, we would love to see that gateway volume to increase over time.
Yes. Kansas City is like it's a smaller Chicago, I call it. All the Class 1 Railways get there, I think, except for the CSX. It's a great hub for business, especially in the grain world out there, but it's a great east west connector as well as a north south connector. CN sees a lot of traffic going through there.
So we would love to be in there with KCS to be able to move more business. But at the same time, we are committed to having an open gateway to continue to move everybody else's business there. That goes from every Class I who needs to move south, north, south from there or to go east and west. And we will be happy to move more grain products to the U. S.
Gulf Coast that's or into the river barge system. So, CN has a unique grain philosophy, I think, where we are very willing to work towards the river for the cheapest barge transportation during certain times of the year versus trying to go long haul to the Gulf Coast. And we try and provide the best options for all of our customers and for customers on other railways to continue to move that product the most efficient way and the least cost and most cost effective way for them.
Yes. And the our original total accessible market did not include crude by rail, but over Kansas City, we believe that there is a sizable opportunity for DRU, deltiv heavy crude opportunity. And we will want to exploit that just as much as any other opportunity that the CNKCS combination exists. This is a pro competitive merger and we believe there's growth opportunity not just in Anthem Oil but also in Carlow. In Carlow, most opportunity are typically a combination of 2 railroad routing and we want the gateway to remain open.
We want the gateway to actually increase the amount of business that's done between the railroad, whether it's Jackson, Kansas City, any of the gateway that we have, we actually want to increase the size of the pile of freight and not do otherwise. So we in no way that we're going to make difficult the business to be done in any of the gateway, whether it's long haul or short haul. We actually want to enhance the competitive advantage gateway that would also include anything that can be done over Kansas City with any of the railroad who serve Kansas City.
So maybe JJ on this point, there's a lot of investors that are now looking at this that maybe aren't as deep in rail jargon. So when you think about what is keeping the gateway open mean and how does that impact sort of the revenue synergy potential here? Can you kind of just kind of break that down at a very simple level? Like when you're saying you're going to keep be keeping the gateways open, kind of what does that mean from a competition standpoint? How does that impact the revenue synergy potential?
There's a perception from some investors that are maybe not as familiar with rail that buying the railroad is to shut other railroads out of the system. And I just want to make sure that we kind of give you a chance to kind of clarify what that means.
Yes. So I'll start with that. But as I said, most rail movement involves 2 railroads, meaning that to go from A to B, the geography of North America are Sobeys and Suez that you will start on 1 railroad and then you will connect with another 1 to get the final destination. And also therefore and also this perception that when you merge, the railroad who's merging actually insists on having the long haul in all cases, even if the long haul may not be the best route and it may not be the most cost effective route for the shippers. So you remember back in the days when Hunter was at CN, we talked about riding protocol.
And routing protocol is basically saying what's the shortest distance between the origin and the destination. And that short distance should really be, in most cases what would dictate the gateway of choice, whether that gateway of choice provide the origin carrier a longer haul or does gateway of choice provide the origin carrier a shorter haul. In order to grow the pie of the freight that moves on a railroad as opposed to shrink it, you would want to use the best route with the gateway that makes the most sense, whether you are you're getting your long haul, you don't. And that's what open gateway is all about. In order for that to function, you have to have a mindset that you provide pricing that's reflective of the length of haul for the gateways to make that possible.
And also that you make an effort to service these interchanges in a way that's conducive to create a decent service product as opposed to have cars stay at the interchange for 2 or 3 days being stuck in between to a railroad. So I think, Doug, if you maybe you want to give some example. We had some example on grain. If grain comes to us from the North Dakota or South Dakota over Kansas City or if it comes to us from some of the originating franchise that we have in CN, we would want to get that grain to go where it wants to go, not where we want it to go, but where the most cost effective supply chain would want it to go. So either it wants to go to Mexico or maybe it wants to go to upper part of Mississippi River or maybe the bottom part of Mississippi River.
But if you let the freight to go the way it should be the most cost and service effective, over time, you will increase the size of the pie of that freight. In order to do that, you have to maintain gateway open and you have to make it easier for these interchange as opposed to insist on trying to get your longest haul, which is over time is very destructive to how much freight you will get. Going back to basic, this is a growth story. So we need to enable service, not to make it difficult. I don't know if Doug, you want to talk about combination of on the carload side?
Yes. Maybe a good example to use, David, is the lumber. So a lot of lumber originates both in Western and Eastern Canada. It moves over multiple gateways going into the U. S.
And we'll use Dallas as an example as a destination market. So it's very large, takes roughly 5, 000 carloads of Canadian lumber every year. And currently, the product moves over Vancouver. So the BN and UP move that down in into the Dallas market. It can move over to Duluth Superior, which is on the map here as well, or it can move via Chicago from Eastern Canada or from Western And those are the 3 major gateways today that move lumber into that market.
Now CN will now be able to provide a new competitive alternative from there all the way in using a combined network to have single line from there all the way in using a combined network to have single line access to that market. CN is not going to close off any of the pricing or gateways, and that's what we've committed to over how lumber moves today. Our role is to provide a better service and better option for our customers to reach that market. And we are planning to do that. Now that applies across all different markets.
So in petroleum and chemicals, the aluminum, everything. And so by keeping it an open gateway, we want to make sure we move the most amount of traffic over our network and really grow.
That's great. Thank you for that. We're coming up to the end of the 45 minutes here, but I do want to talk a little bit about the margin profile on this incremental growth, right? If we sort of just accept that someday these 2 networks come together and we start to access this addressable market, how should we be thinking about the incremental margins on this growth? Should it be sort of standard with what normal incremental margins are?
Will there be some seasoning involved in sort of matching back freight on different moves? Like how should we think about the overall margin impact of the growth that comes in from this transaction?
So I think you said it right. It was probably seasoning. We'll see early days which market has the biggest traction early on, whether it's carload to the interchange that we just talked about or some unit train business or the intermodal long haul or could be even a port business. So I think the book of business over time because of the North American economy and USMCA will probably grow a little more on the container side than the overall carload side. Carload would grow, no question, but USMCA and the pork business might have a little more potential because of those 2 depend on the consumer and the consumers tend to generate quite a bit of container freight, not as much carload freight.
So the profile of the rail industry in North America, especially of this combined company over time, is probably going toward every 5 years, every year is some incremental percent of the total book of business, which will be antimicrobial related, either port business, importexport or domestic business as it relate to consumer consumptions, but also very significant play on the carload side. I think on the carload side, automotive is probably going to be a major sector. We talked about aluminum and steel. There's also plastics. The USMCA requires that the amount of U.
S. Content in each finished vehicle is higher. So that means more of the raw material will be sourced locally as supposed to be coming from offshore. And I mean, that's a good thing for the rail industry. And again, as long as we create a product that customers want to buy, So when you talk about Open Gateway and you talk about choices, you're really talking to what actually helps grow the pie of the freight.
You want customers to buy from you because they want to, not because they have to because you play the game of closing gateway or captive shipper. The more we create products that people want to buy because they want to, I suppose that they have to, the more that CN, KCS combination will be successful because our view is a view of expansion, it's a view of growth. It's, yes, operating ratio and cost is important, but even more important is growing EPS, growing operating income, growing free cash flow. In order to do that, we need to really make a maximum use of these important assets. And then I think that's really much more the future of the industry in the next decade, next 2 decades as opposed to try to nail down to only the freight that can produce an operating ratio of 50% operating ratio, for example.
I don't know if that's helped, but that's kind of the vision that we have.
That is helpful. I do want to be conscious of time here because we are coming up to the end of our 50 minutes. Do you want to close us out here, JJ or Doug, with a couple of closing comments?
Yes. I think we're more than ever, especially after 2 weeks of effort on this, but also after sort of a number of days of due diligence, we're more confident than ever that the total accessible market that we have is actually a conservative amount and also that the our base case scenario in terms of how much business we can convert on the revenue side is also on a conservative amount. More work to be done, but there's more reason today to be confident about the potential of the USMCA and the combination railroad in terms of top line growth as well as higher level of confidence that we can deliver the expectation of our base case by the time that we would combine together in late 2022. I don't know, Doug, if you want to add some of your comments on some of your work.
Thanks, JJ. Listen, the opportunities are fantastic here as we continue to see more and more customers come to us with opportunities that they see that we can use. A lot of these will be contained within our estimates in our total accessible market, but we continue to see more and more solid concrete examples for us to move more product on this combined network. So we're very, very happy that we're progressing. And I'd like to just thanks everyone for listening.
Yes. Customer support is strong. As you know, we're up to 700 support letters and growing. Shareholder support is also real. Cascade came up publicly in favor of our merger of our combination.
Some other large investors also told us very specifically to support the long term vision of what this network will become over the next few years. And from a customer side and investor side, the support is there. So that's a question of finishing the work and having further dialogue with the KCS Board to eventually be able to get to where we want to go, which is combining the 2 team and winning more freight together. Thank you for the time today.
All right. Thanks, guys, and thanks, everyone, for joining us. We will end it here.
Thank