Collaboration has been the active strategy of the other Class I railroads since Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) announced their proposed merger in July.
Now, Canadian National (NYSE: CNI) and CSX (NASDAQ: CSX) said that they have signed a Memorandum of Understanding to develop a new intermodal service into Nashville, Tennessee.
The cooperation will provide an all-rail alternative for international containers moving from Canada’s West Coast maritime gateways through Memphis directly into Nashville.
The companies said inland traffic will benefit from faster, more reliable, and more sustainable services as the trucking leg from Memphis is replaced by steel-wheel interchange.
“This agreement allows us to expand our reach, enabling our customers to efficiently access more markets. Collaboration like this benefits everyone; railroads, customers, and communities, by driving growth, reliability, optionality, and sustainability,” said Janet Drysdale, CN interim chief commercial officer, in a release.
The new service follows the companies’ existing interline agreements serving the ports of New York, New Jersey and Philadelphia on the U.S. East Coast since 2019. It also comes ahead of the October implementation of expensive U.S. port fees for China-linked container vessels, which has led ocean lines to shift some services away from U.S. hubs to the ports of Vancouver and Prince Rupert — the latter served exclusively by CN.
“At CSX, we’re committed to working with our interchange partners to create solutions that deliver mutual value and expand the options available to customers,” said Kevin Boone, executive vice president and chief commercial officer. “This new service with CN provides a faster and more sustainable all-rail option into Nashville, helping shippers strengthen their supply chains while reducing truck traffic on our highways.”
The agreement is the second major interline pact for CSX following the UP-NS news, and after the announcement that it would not pursue a merger with BNSF. Late last month, CSX said it was partnering with BNSF on coast-to-coast domestic and international intermodal service.
CN has publicly promoted the value of collaboration over merger in the wake of UP-NS, stung by its failure to gain regulatory approval of its own acquisition of Kansas City Southern in 2021, only to see the latter merge with rival Canadian Pacific in 2023.
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Find more articles by Stuart Chirls here.
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