CN, Union Pacific reach agreement to expand rail access across North America

Canadian National Railway (CN) and Union Pacific have signed a binding memorandum of understanding that will expand the railroads’ operating rights and access to key markets across North America.

Under the agreement, Union Pacific will receive expanded operating rights over CN’s Elgin, Joliet & Eastern Railway corridor through Chicago. In return, CN will gain new rights over Union Pacific’s network between Memphis, Tenn., and Eagle Pass, Texas, supporting freight movements between Canada and Mexico.

“We are thrilled to have an agreement with Union Pacific to expand CN’s access to Mexico. 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 Tracy Robinson, resident and CEO of CN. “By extending our reach, we are creating new opportunities for growth while continuing to deliver the safe, reliable service our customers expect. This is another example of CN’s commitment to strengthening rail competitiveness across North America.”

“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,” said Jim Vena, CEO of Union Pacific.

The settlement agreement is contingent on approval from the U.S. Surface Transportation Board and the closing of Union Pacific’s proposed merger with Norfolk Southern.

Under the agreement, CN would gain access to certain shipper facilities where the number of Class I railroad options would be reduced from two to one or three to two, where commercially and operationally feasible.

CN would also acquire Norfolk Southern’s ownership interests in the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis.

The agreement would further provide CN with overhead rights between Tuscola, Ill., and East St. Louis, Ill., as well as rights to serve customers between St. Louis, Mo., and Kansas City, Mo. CN would also gain access to Union Pacific’s Neff Yard, giving it a footprint in Kansas City.

CN has agreed not to oppose the Union Pacific-Norfolk Southern merger, with the two companies to collaborate through the STB process to implement the agreement.

“From day one, we’ve said our merger with Norfolk Southern will preserve and enhance competitive options and create a stronger railroad industry that delivers better service for customers,” said Vena. “This settlement agreement reinforces those commitments by giving expanded access and operating rights to a tough competitor.”

“As the rail industry considers significant structural change, it is essential that customers continue to benefit from meaningful competition and choice,” said 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.”