The news: Union Pacific and CN have signed a binding agreement that gives each railroad operating rights on parts of the other’s network. In return, CN will not oppose Union Pacific’s proposed merger with Norfolk Southern at the Surface Transportation Board.
Union Pacific gets expanded operating rights over CN’s Elgin, Joliet & Eastern line, the belt route around central Chicago’s congestion. CEO Jim Vena called the EJ&E “the quickest way around Chicago.”
CN gets new rights over Union Pacific’s network between Memphis and Eagle Pass, Texas, a route for freight moving between Canada and Mexico. A companion agreement also gives CN its first Kansas City footprint through access to Union Pacific's Neff Yard.
Why it matters: The Union Pacific-Norfolk Southern merger would create the first coast-to-coast railroad under one owner. The STB is weighing whether that concentrates too much control over freight lanes. Rival railroads’ objections carry weight in that review, and CN was one of the objectors. The settlement removes its opposition.
The access terms: CN gains access to shipper facilities where the merger would reduce Class I options from two railroads to one, or from three to two, where commercially and operationally feasible.
The catch: The access guarantees take effect only if the STB approves the merger and the deal closes.
