Class 1 railroads Canadian Pacific Kansas City (CPKC) and CSX Corp., along with shortline railroad Genesee & Wyoming Inc. (GW), announced on June 28 that they have reached agreements to create a new direct CPKC-CSX interchange connection in Alabama and establish a new freight corridor for shippers that connects Mexico, Texas, and the US Southeast.
As part of a series of proposed transactions, CPKC and CSX would each acquire or operate portions of Meridian & Bigbee Railroad LLC (MNBR), a GW-owned railway in Mississippi and Alabama, to establish the new corridor. MNBR runs between Meridian, Miss., and Montgomery, Ala., and is currently operated under a combination of ownership and operating agreement.
According to the agreements, CPKC would acquire and operate the MNBR segment between Meridian and Myrtlewood, Ala., and CSX would operate the lines currently leased by MNBR east of Myrtlewood, resulting in a direct CPKC-CSX interchange at or near Myrtlewood.
In exchange, GW would acquire certain Canadian properties owned by CPKC and other rights, while MNBR would receive rights to continue to provide local service to existing customers on former MNBR-owned lines and connect with other railroads without interchange restrictions.
“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,” said Keith Creel, CPKC President and CEO. “With this new east-west connection taking advantage of each railway’s routes and service, we can extend our reach converting more freight traffic to rail and off our highways.”
Certain portions of the transactions are subject to regulatory review by the US Surface Transportation Board. Other terms of the transactions were not disclosed.
“CSX is excited to establish this new interchange connection with CPKC, which provides shippers with a compelling transportation option with access to markets in Texas and Mexico, as well as into the heart of the thriving and dynamic U.S. Southeast,” said Joe Hinrichs, President and CEO of CSX.