UP, CN sign pacts on UP-NS merger, Canada-Mexico trade corridors

CN and Union Pacific Railroad have signed two memorandums of understanding (MOU) that grant new access for the Class Is.

The first MOU is dependent on the Surface Transportation Board's (STB) approval of the proposed UP-Norfolk Southern Railway merger and calls for CN to drop its opposition to the merger. The agreement establishes a framework for CN to gain access to shipper facilities where the merger would reduce Class I options from three to two or from two to one. 

CN would also gain overhead rights between Tuscola and East St. Louis in Illinois and between St. Louis and Kansas City in Missouri, as well as usage of UP's Neff Yard in Kansas City. Additionally, CN would acquire NS' ownership interests in the Kansas City Terminal Railway Co. and the Terminal Railroad Association of St. Louis, CN officials said in a press release.

"As the rail industry considers significant structural change, it is essential that customers continue to benefit from meaningful competition and choice," said CN President and CEO Tracy Robinson. "This framework would preserve competitive access to key markets, including Kansas City, while positioning CN to continue providing reliable and efficient options for customers across North America."

The second MOU provides UP with expanded operating rights over CN's Elgin, Joliet & Eastern Railway (EJ&E) corridor around Chicago, while granting CN new rights over UP's network between Memphis, Tennessee, and Eagle Pass, Texas. 

"This is a natural extension of our north-south franchise and will open new routes for customers, provide greater choice and strengthen connections between Canada and Mexico," said Robinson.

UP CEO Jim Vena adds, "I’ve seen the benefits first-hand of what the EJ&E route around Chicago can do for a railroad, and we look forward to having access to the quickest way around Chicago."