August 8, 2019

CN and CSX ink deal for intermodal service between eastern cities in Canada and U.S.

Railways aim to convert long-haul trucks to interline rail services and capture more consumer freight.

By DC Velocity Staff

Canadian National Inc. (CN) railway and the eastern railroad CSX Corp. today announced a new intermodal service offering connecting CN's greater Montreal and Southern Ontario areas to CSX-served ports on the U.S. east coast, saying the move aims to convert long-haul trucks to interline rail services.

Beginning Oct. 7, the service will connect to the Jacksonville, Fla.-based CSX ports of Philadelphia, New York, New Jersey, and the New York City metropolitan area. The move will also increase both railways' offerings for consumer-focused shipments, whereas rail lines have traditionally focused on bulk shipments such as coal and grain.

"Over the long term, the freight market will increasingly depend on demand driven by the consumer economy and the rail industry must create new intermodal services that can successfully rival the over the road options," JJ Ruest, president and chief executive officer at CN, said in a release. "This interline service fits perfectly with our strategic focus on feeding our unique network through organic and inorganic growth opportunities, including extending our reach into new geographic markets."

The deal is a natural opportunity for both railroads, since it will allow trains to run directly into the heart of the metropolitan markets of Toronto and Montreal via Montreal-based CN's intermodal yards, the firms said.

"CSX is pleased to work with CN to deliver superior all-rail intermodal service into the Montreal and Toronto markets," said Jim Foote, president and chief executive officer at CSX. "Answering a need expressed by our customers, this new service positions us to capture market share from trucks and increases capacity in these expedited lanes, as larger container ships call at the Port of Philadelphia and Port of New York and New Jersey."

The move follows CSX' completion in 2017 of its $850 million "National Gateway" project to offer daily rail service connecting East Coast markets to consumers, manufacturers, and businesses in the Midwest.

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