CANADIAN Pacific Kansas City (CPKC) and CSX Transportation are seeking United States Surface Transportation Board (STB) approval to establish a new interchange connection in Alabama that will open-up a new freight corridor linking Mexico, Texas and the southeast of the US.
CPKC has filed a minor application on behalf of itself and its wholly owned subsidiary Kansas City Southern Railway Company (KCS) to acquire approximately 81km of line between Meridian, Mississippi, and Myrtlewood, Alabama, which it is calling the Western Line, from Genesee & Wyoming-owned Class III Meridian & Bigbee Railroad (MNBR).
“KCS is acquiring the Western Line in order to establish a direct, efficient interchange with CSX at Myrtlewood, creating a new east-west Class I freight rail corridor linking CPKC-served markets in Mexico and the Southwestern United States with CSX-served markets in the Southeastern United States and beyond,” CPKC told the STB in its filing.
It added that the new freight rail corridor will provide a “shorter and more efficient route for existing CPKC-CSX traffic and will provide a new, highly attractive option for new customers, thereby enhancing competition.”
MNBR will retain exclusive trackage rights over the Western Line to provide local service and some overhead service without any restriction on interchange.
CPKC told the STB that the transaction builds, and is contingent, on CSX retaking possession of its line east of Myrtlewood and resuming operations between Myrtlewood and Burkville, Alabama, which it called the Eastern Line. MNBR operates the Eastern Line pursuant to a lease that is scheduled to expire in November 2023. By resuming operation on the Eastern Line, CSX will be able to interchange efficiently with CPKC, MNBR, and Alabama & Gulf Coast Railway (AGR), another G&W railway, at Myrtlewood.
The Eastern Line comprises two segments totalling approximately 150km and includes Selma Yard, at Selma, and 12 stations. CSX says that following the upgrade of the Eastern Line, it will be able to provide shippers with more efficient, competitive service and compete not only with other railroads, but also road freight.
CPKC announced the new joint service agreement with CSX and involving G&W during its Investor Day on June 28. Terms of the transactions were not disclosed at that time.
“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,” CPKC president and CEO, Mr Keith Creel said in June. “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.”
