CALGARY, ALBERTA, CANADA — Canadian Pacific Kansas City (CPKC), CSX Corp. and Genesee & Wyoming Inc. (G&W) have reached agreements to create a new direct CPKC-CSX rail interchange connection in the state of Alabama that establishes a new freight corridor for shippers and connects Mexico to the US Southeast.
As part of the series of proposed transactions announced June 28, Class I railroads CPKC and CSX would each acquire or operate portions of Meridian & Bigbee Railroad, LLC (MNBR), a G&W-owned railway that runs between Meridian, Mississippi, US, and Montgomery, Alabama, US, and is operated under a combination of ownership and operating agreements.
Terms of the transactions were not disclosed and will be addressed in definitive agreements that the parties have agreed to negotiate. Certain portions of the transactions are subject to regulatory review by the US Surface Transportation Board.
Grain and agricultural products are significant market segments for CPKC and CSX, which serve grain elevators, feed mills and processing facilities across their North American networks. Corn, soybeans and rice are among the major crops grown in the US Southeast.
“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 US Southeast,” said Keith Creel, president and chief executive officer of CPKC. “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.”
Under the agreements, CPKC would acquire and operate the segment of the MNBR between Meridian and Myrtlewood, Alabama, and CSX would operate the lines currently leased by MNBR east of Myrtlewood. As a result, CPKC and CSX would establish a direct CPKC-CSX interchange at or near Myrtlewood.
In exchange, G&W, a holding company that manages more than 100 shortline and regional freight railroads worldwide, would acquire certain Canadian properties owned by CPKC and other rights. 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.
“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 US Southeast,” said Joe Hinrichs, president and CEO of CSX. “This new service is a demonstration of our commitment to creating product offerings for shippers that help them leverage the efficiency and sustainability advantages of rail to drive growth.”
