CN, Union Pacific agreement could expand Canada-Mexico rail service
For Canadian businesses moving goods through North American rail networks, the agreement could eventually provide additional routing and service options between Canada, the U.S. Midwest and Mexico.
New Canada-Mexico rail service options could emerge under an agreement between Canadian National Railway (CN) and Union Pacific that would give CN operating rights toward the U.S.-Mexico border.
CN and Union Pacific announced two binding memoranda of understanding on July 22.
The first deal lets CN run its trains on Union Pacific's tracks between Memphis, Tennessee, and Eagle Pass, Texas, which is the second-busiest rail crossing between the United States and Mexico. In return, Union Pacific gets wider use of CN's Elgin, Joliet & Eastern Railway line around Chicago.
CN President and CEO Tracy Robinson said the agreement would expand the railway's access to Mexico and strengthen connections between the two countries.
The second deal gives CN more access across the U.S. Midwest. It is part of a settlement linked to Union Pacific's proposed merger with Norfolk Southern, and it only takes effect if the U.S. Surface Transportation Board approves the merger and the deal closes.
Under the settlement, CN would gain rights to serve customers between St. Louis and Kansas City, Missouri, including access to Union Pacific's Neff Yard intermodal terminal. CN would also receive overhead operating rights between Tuscola and East St. Louis, Illinois.
CN would acquire Norfolk Southern's ownership interests in the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis.
CN would also gain access to certain shipper facilities where the proposed merger would reduce Class I railway options from two to one or from three to two, where commercially and operationally feasible.
CN has agreed not to oppose the Union Pacific-Norfolk Southern merger.
Cole International offers trade consulting and freight forwarding services to help Canadian businesses manage shipments across North American trade lanes.
Reach out to one of our trade professionals to discuss your freight requirements and the routing options available for shipments moving between Canada, the U.S., and Mexico.