Red Deer Railway becomes G&W's first subsidiary in western Canada
12/23/2024
By Jeff Stagl, Managing Editor
Christmas came early for Genesee & Wyoming Inc. (G&W). On Dec. 1, the short-line holding company launched its first new subsidiary railroad in 10 years and first-ever railroad in western Canada.
The new Red Deer Railway Ltd. (RDR) now operates in Alberta. The 43-mile RDR runs from Jackson to Homeglen, and uses operating rights from Canadian Pacific Kansas City to run trains from Red Deer to Chigwell to Prentiss in the province.
The short line interchanges with CPKC in Red Deer and provides rail-car storage, transloading and car switching services, among its broader logistics offerings. The new railroad has 10 employees and predominantly serves customers in the energy industry.
The assets and operating rights for RDR were previously acquired by G&W as part of an agreement forged in mid-2023 between G&W, CPKC and CSX. It’s possible the acquisition from CPKC will result in more than RDR over time, G&W officials said in an email.
“We are hopeful that some other opportunities in western Canada can come to fruition as a result of the CPKC agreement,” they said.
For all intents and purposes, G&W started RDR from scratch by sourcing locomotives, hiring employees and ensuring track integrity after the short line assumed operations, G&W officials said. Now, the new railroad in western Canada affords several advantages.
“There’s a great rail market in western Canada with lots of opportunities to move energy and agricultural products,” G&W officials said. “RDR gives us an opportunity to show industries and customers in the west that we can deliver the same safe and reliable freight-rail service that we’ve offered customers in Newfoundland and Labrador, Nova Scotia, Ontario and Quebec in the east since 1997, when G&W first entered Canada.”
In addition, the formation of RDR plays into G&W’s strategy to grow its core business: acquire or develop more short lines.
“Establishing a short line in a new geography — namely, the Alberta Industrial Heartland — with tremendous growth potential fits into that,” G&W officials said.
RDR operates 43 miles of track from Jackson to Homeglen, Alberta. Via CPKC operating rights, the short line also runs trains from Red Deer to Chigwell to Prentiss. Genesee & Wyoming Inc.G&W now is trying to get the word out about RDR through traditional media relations in Alberta and via its business development team in western Canada, which focuses on reaching out directly to area businesses. The aim is to promote the short line’s services, “which go beyond typical first- and last-mile freight transportation to include rail-car storage and transloading capabilities,” G&W officials said.
RDR plans to tailor its services and operation plans based on the individual needs of area businesses along its 43-mile route. The short line can help shippers find the best rail-served location for their business or reach new or additional markets with G&W’s access to the North American rail network, G&W officials said.
The last time G&W launched a new railroad? In 2014, when the Rapid City, Pierre & Eastern Railroad (RCPE) began operations. G&W created the 678-mile RCPE — which operates in Minnesota, Nebraska, South Dakota and Wyoming — after acquiring the western end of the former Dakota, Minnesota and Eastern Railroad.
In addition to RDR and 10 other railroads, G&W’s Canadian operations include Railcare Inc., a rail-car maintenance and repair shop in Hamilton, Ontario, and BMS Locomotive Service Group Inc., a locomotive maintenance and repair facility in Edmonton, Alberta.
