CP and CSX discuss smoothing Chicago interchange

Joint marketing and operating agreement is possible
RELATED TOPICS: CSX | CANADIAN PACIFIC | PEOPLE | EHH | OPERATIONS | CHICAGO
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keithcreel
CP CEO Keith Creel
Canadian Pacific
NEW YORK — Canadian Pacific and CSX Transportation are discussing a joint marketing and operating agreement that would, among other things, create run-through trains to bypass choke points in Chicago.

“We’ve had some discussions with CSX operationally as well as commercially,” CP CEO Keith Creel told an investor conference on Wednesday. The talks are in early stages, he emphasized.

CSX is CP’s largest interchange partner in Chicago. The two railroads exchange about 400 cars there per day, Creel says. Of those, 100 cars could be sent deep into CSX territory as a run-through train and avoid handling by the Belt Railway of Chicago. Likewise, CSX could build a train destined for points on the CP network.

Such an arrangement would cut transit time and improve reliability for the railroads’ joint customers, Creel says.

“I think that’s a pretty compelling opportunity,” he told the Wolfe Research transportation conference.

Creel has a close relationship with CSX CEO E. Hunter Harrison, who left CP in January and became CSX’s chief executive in March.

Meanwhile, CP and Norfolk Southern are locked in a trackage rights dispute that centers on a short stretch of the Indiana Harbor Belt.

Improving operations in Chicago was a key element of CP’s ill-fated plan to acquire NS in 2015-16. CP said the CP-NS merger would allow it to divert interchange traffic to alternative gateways as well as create run-through trains.

CP exchanges nearly half of all of its interchange traffic in Chicago, which has long been a weakness of the CP system.

Unlike rival Canadian National, CP has lacked its own route from Ontario to the Windy City. Instead, CP runs up to 10 trains per day between Detroit and Chicago over trackage rights on NS and must contend with clearance issues in the Windsor Tunnel, which can’t accommodate full domestic double-stacks. CP also lacks an efficient way through Chicago – something CN gained with its 2009 purchase of the Elgin, Joliet & Eastern.

CORRECTION: An earlier version of this report incorrectly identified the Belt Railway of Chicago. It is the railroad that CSX and CP use to exchange as many as 400 freight cars per day. May 26, 2017, 11:51 a.m. Central time.

NEWSWIRETrains News Wire

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