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12/5/2005



Rail News: Rail Industry Trends

KCS, NS team up to exploit Meridian Speedway's potential


Kansas City Southern and Norfolk Southern Corp. are partnering to expand capacity and improve service on KCS’320-mile Meridian Speedway between Meridian, Miss., and Shreveport, La. The Class Is recently agreed to form a joint venture to move more traffic on the line, including intermodal shipments between the southeast and southwest U.S., and carloads and intermodal loads between the southeast and KCS’ U.S./Mexican rail network.

During the next four years, NS will spend $300 million on capital improvements to expand the Speedway’s capacity and increase train speed. Projects will include installing signal systems, and extending sidings and portions of double track.

As owner of the Speedway, KCS will contribute the line to the joint venture, retaining a 70 percent interest; NS’ capital investment will provide the Class I a 30 percent interest. KCS will continue to operate trains on the Speedway while NS will be the sole provider of certain intermodal moves over the line.

“This partnership allows us to offer shippers fast, competitive rail service along the shortest rail route into the southeast from both Mexico and the southwest,” said KCS Chairman, President and Chief Executive Officer Mike Haverty in a prepared statement. “It [also] will allow us to extend the reach of the Port of Lazaro Cardenas not only into Texas and the Midwest, but directly into the southeast, as well.”

The Class Is plan to seek Surface Transportation Board approval for the joint venture.

“The transaction represents an innovative way for carriers to work together to add critical rail capacity,” said NS President and CEO Charles “Wick” Moorman.


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