CPKC set to open auto facility near Dallas in June
5/29/2024
By Jeff Stagl, Managing Editor
In January 2021, Kansas City Southern and NorthPoint Development announced plans to jointly develop a master planned Wylie Logistics Park in Wylie, Texas, adjacent to the railroad’s David L. Starling Wylie Intermodal Terminal.
The Dallas-area park was designed to feature 2.4 million square feet of warehousing and distribution space, a state-of-the-art intermodal terminal and various transportation infrastructure.
But those plans never materialized. Shortly after the announcement, Canadian Pacific launched an effort to merge with KCS, and the two Class Is ultimately combined in April 2023.
Canadian Pacific Kansas City became the owner of the Wylie Intermodal Terminal, which opened in 2015 and was expanded in 2018. The terminal features about 20,000 feet of track capacity, an annual lift capacity exceeding 340,000 containers, 1,800-wheeled parking spaces and 300 container stack spots.
Now, CPKC is close to embarking on a different development path for the facility and its surroundings. In June, the Class I expects to open the first phase of the Wylie Automotive Facility on 30 acres near the intermodal terminal. The auto compound will be expanded in additional future phases.
Over the past few months, CPKC’s top executives addressed the Wylie Intermodal Terminal during several analyst and financial conferences. The capacity of the new auto facility — which will handle many of the top selling vehicles in the Texas market — already is nearly sold out, they say.
Shown: A CPKC auto facility in Vancouver, British Columbia. Adjacent to the railroad’s intermodal terminal in Vancouver, the auto compound opened in 2019. Canadian Pacific Kansas CityThe execs are counting on the auto facility to help drive more automotive business, which has been stellar of late. In the first quarter, automotive revenue skyrocketed 112% to CA$265 million and volume ballooned 94% to 55,700 units on a year-over-year basis.
CPKC has access to 25 automotive production plants that can reach 200 million consumers in Canada, Mexico and the U.S. Midwest, and serves about 90% of the auto assembly facilities in Mexico.
The Dallas-Fort Worth area is a key growth region for the Class I. CPKC now is using land previously owned by KCS in Wylie to begin offering a new service to the marketplace, said Executive Vice President and Chief Financial Officer Nadeem Velani.
“We announced the [Meridian and Bigbee Railroad] deal with CSX, where we can look to bring Southeast U.S. traffic and take trucks off the road, and auto parts are going to be a big part of that and moving it into ... Wylie,” he said. “So, certainly utilizing excess land and bringing that as an opportunity to grow traffic is our No. 1 priority.”
The auto compound is part of CPKC’s playbook to unlock an entirely new supply-chain model for original equipment manufacturers, said EVP and Chief Marketing Officer John Brooks.
“[This will] give them the service, reliability and capacity certainty like they've never seen before,” he said.
The Wylie Automotive Facility could greatly increase vehicles’ length of haul from an assembly plant to distribution points, said President and CEO Keith Creel. Vehicles shipped from auto plants in Ontario to the Chicago market could instead head all the way to the Dallas market via CPKC.
“It's going to create empty supply to go down to Mexico and lengths of haul that today perhaps stop at Laredo or Robstown or are going to Minneapolis/St. Paul or to Canada,” said Creel.
There also are thousands of potential rail carloads of finished vehicles moving along Interstate 20 and other highways from Southeast markets that perhaps are heading to the Dallas area via truck. Those are ripe opportunities, said Creel.
“This is all a good story,” he said.