CPKC, CSX, G&W to create new corridor linking Mexico, Texas, US Southeast

Canadian Pacific Kansas City, CSX and Genesee & Wyoming Inc. today announced they've reached agreements for the creation of a  direct CPKC-CSX interchange connection in Alabama.

As part of the series of proposed transactions, CPKC and CSX would each acquire or operate portions of Meridian & Bigbee Railroad LLC (MNBR), a G&W-owned railroad in Mississippi and Alabama, to establish a new freight corridor for shippers that connects Mexico, Texas and the U.S. Southeast, the companies said in a joint press release.

The strategic acquisition will provide more shipping options to intermodal, automotive and other customers, said CPKC President and CEO Keith Creel.

"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," he said.

Added CSX President and CEO Joe Hinrichs: "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."

The MNBR runs between Meridian, Mississippi, and Montgomery, Alabama, and currently is operated under a combination of ownership and operating agreements.

"We are pleased to have entered into agreements with CSX and CPKC that will enable MNBR to continue providing customers with outstanding short-line service from Linden, Alabama, to Meridian, Mississippi, while enabling our Class I partners to create a new connection into the Southeast U.S.," said G&W CEO Jack Hellmann. "At the same time, we have enhanced several agreements related to other G&W short-line railroads and are collaborating on the expansion of our service to Alberta and the Alberta Industrial Heartland in conjunction with CPKC."

Under the agreements announced today, 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 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.

Terms of the transactions were not disclosed and will be addressed in negotiated, definitive agreements. Parts of the transactions are subject to review by the Surface Transportation Board.