CPKC, CSX to create rail corridor connecting Mexico, Texas and the Southeast U.S.

CPKC CSX to create rail corridor connecting Mexico Texas and.jpg

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Dive Brief:

  • Railroads Canadian Pacific Kansas City, CSX and Genesee & Wyoming reached an agreement to create a new direct interchange rail connection in Alabama, according to a June 28 joint release.
  • Under the agreement, the railroad companies would acquire or operate parts of G&W’s Meridian & Bigbee Railroad between Meridian, Mississippi, and Myrtlewood, Alabama, according to the release.
  • “This strategic acquisition will bring more shipping options to intermodal, automotive and other customers by providing a new, efficient corridor connecting expanding markets in Mexico, Texas and the U.S. Southeast,” CPKC President and CEO Keith Creel said in a statement.

Dive Insight:

MNBR runs between Meridian, Mississippi, and Montgomery, Alabama, and is operated under ownership and operating agreements, according to the release. Once the transaction is approved, CPKC will acquire and operate the part of MNBR between Meridian and Myrtlewood, while CSX will operate the lines leased by MNBR east of Myrtlewood.

“At the same time, we have enhanced several agreements related to other G&W short line railroads and are collaborating on the expansion of our service to Alberta and the Alberta Industrial Heartland in conjunction with CPKC,” G&W CEO Jack Hellmann said in the release.

As part of the expansion effort, G&W will acquire some Canadian properties owned by CPKC and other rights, while MNBR continues providing local service to existing customers and connecting with other railroads without interchange restrictions, per the release.

The agreement is the latest in a slew of rail partnerships. After Canadian Pacific was approved to acquire Kansas City Southern in March, the newly formed railroad CPKC has been making advancements toward a stronger cross-border intermodal service to help boost volumes in an industry struggling with service disruptions and declining volumes.

In April, CPKC secured a multiyear agreement to handle rail shipments for trucking company Knight-Swift’s Mexico service just days after signing a partnership agreement with Schneider National. Under that agreement, the carrier intends to expand its intermodal service between the upper Midwest and Mexico.

CPKC isn’t the only railroad looking to connect shippers to Mexico’s growing market. In April, rail operators Union Pacific, Canadian National and Grupo México Transportes teamed up to leverage parts of their networks to create a service connecting Canada to Mexico.

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