As part of a series of transactions, Canadian Pacific Kansas City (CPKC), CSX Corp. (CSX) and Genesee & Wyoming Inc. (G&W) have reached agreements on June 28 to create a new direct CPKC-CSX interchange connection in Alabama, creating a link to Mexico, Texas and the southeastern U.S.

Terms of the transactions were not disclosed and will be addressed in definitive agreements that the parties have agreed to negotiate.

As part of the deals, CPKC and CSX would each acquire or operate portions of Meridian & Bigbee Railroad LLC (MNBR), a G&W-owned railway in Mississippi and Alabama. The MNBR runs between Meridian, Mississippi, and Montgomery, Alabama, and is operated under a combination of ownership and operating agreements.

Under the agreements, CPKC would acquire and operate the segment of the MNBR between Meridian and Myrtlewood, Ala. and CSX would operate the lines currently leased by MNBR east of Myrtlewood, Alabama. The deal would result in CPKC and CSX establishing a direct 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. 

Certain portions of the transactions are subject to regulatory review and approval from, or exemption by, the U.S. Surface Transportation Board.

"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 U.S. Southeast," said Keith Creel, CPKC president and CEO. "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."

CSX President and CEO Joe Hinrichs, said the interchange would provide shippers with a transportation option that adds access to markets in Texas and Mexico and the southeastern U.S.

"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," he said.

G&W CEO Jack Hellmann said the agreements will allow MNBR to continue providing customers with 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."

"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," Hellmann said.