Union Pacific and CN have signed two agreements to expand rail connectivity across North America, including new operating rights in Chicago, additional cross-border freight routes, and measures to preserve competition in the event of Union Pacific’s proposed merger with Norfolk Southern.
The railways announced they have signed a binding Memorandum of Understanding that will expand each company’s access to key sections of the North American rail network.
Under the agreement, Union Pacific will receive expanded operating rights over CN’s Elgin, Joliet & Eastern (EJ&E) Railway corridor around Chicago. The route is intended to provide a more direct bypass of one of North America’s busiest rail hubs, helping to improve freight movements through the region.
In return, CN will gain operating rights over Union Pacific’s network between Memphis, Tennessee, and Eagle Pass, Texas. The arrangement is designed to support new freight services linking Canada and Mexico, extending CN’s existing north-south network.
CN President and CEO Tracy Robinson said: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. 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.
The announcement comes alongside a separate settlement agreement between the two railways relating to Union Pacific’s proposed merger with Norfolk Southern.
The agreement establishes a framework under which CN would receive additional competitive access if the merger is approved by the US Surface Transportation Board (STB) and the transaction is completed.
As part of the settlement, CN would gain access to certain shipper facilities where the number of Class I rail operators would otherwise be reduced, subject to commercial and operational feasibility.
The agreement also provides for CN to acquire Norfolk Southern’s ownership interests in the Kansas City Terminal Railway Company and the Terminal Railroad Association of St. Louis.
In addition, CN would receive new overhead operating rights between Tuscola and East St. Louis, Illinois, together with rights to serve customers between St. Louis, Missouri, and Kansas City, Missouri. The arrangement would also give CN access to Union Pacific’s Neff Yard in Kansas City.
Union Pacific CEO Jim Vena said: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. This settlement agreement reinforces those commitments by giving expanded access and operating rights to a tough competitor.
The settlement is intended to preserve customer choice while expanding access for a competing railway. Under the agreement, CN has also committed not to oppose the proposed Union Pacific–Norfolk Southern merger during the STB approval process.
CN President and CEO Tracy Robinson said:As the rail industry considers significant structural change, it is essential that customers continue to benefit from meaningful competition and choice. 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.
