WASHINGTON — Canadian National says its proposed acquisition of CSX Transportation’s line linking Montreal with Syracuse, N.Y., will improve service for cross-border traffic.
CN, last week, sought U.S. Surface Transportation Board approval of the transaction involving the sale of 236.3 miles of track in New York state. CN also proposed a schedule for review of the deal, including an effective closing date of May 7, 2020, under the board’s rules for minor transactions.
The Massena Line sale totals 278.1 miles between Beauharnois, Quebec, and Woodard, N.Y., including 41.8 miles of trackage in Quebec and branch lines and spurs on both sides of the border. Among them: CSX’s 31-mile Fulton Subdivision.
CN will house the U.S. trackage under its Bessemer & Lake Erie Railroad subsidiary. The acquisition cost was redacted in CN’s Oct. 10 regulatory filing, which was posted to the board’s website on Oct. 11.
The deal will move the CN-CSX revenue interchange to Woodard, N.Y., just north of Syracuse, from the current location at Huntingdon, Quebec. From an operational perspective, however, the railroads will exchange traffic at CSX’s Dewitt Yard in Syracuse and CSX’s Belle Isle Yard near Solvay, N.Y.
Janet Drysdale, CN’s vice president of financial planning, wrote that CN sought to acquire the line in order to preserve CN’s direct connection with CSX.
“CNR did not want an additional railroad to operate over the Massena Lines as a bridge carrier between the CN System and CSX,” she wrote. “Inserting an additional railroad into that CN System-CSX joint route would reduce operating efficiency, increase costs, and increase transit times by adding another interchange and requiring coordination with and participation of a third carrier in addition to the CN System and CSX, to the detriment of existing interline customers of the CN System and of CSX that move overhead traffic over the U.S. Massena Lines.”
New CN through trains M327 and M326, which will carry mixed manifest and intermodal traffic, will run between CN’s Taschereau Yard in Montreal and Dewitt.
The trains will replace two pairs of trains CSX currently uses to handle through traffic, which includes Selkirk-Massena, N.Y., trains Q620 and Q621 as well as a pair of transfer jobs, B798 and B799, that run between Massena and Huntingdon.
“Eliminating these two transfer assignments will avoid delays that result from coordinating crew schedules for those trains,” CN says. “This will improve overall efficiency of operations, reducing total transit time by approximately 24 hours.”
Another transfer job, Massena-St. Agnes, Quebec train B762, will be abolished as well.
Trains M327/M326 will haul traffic gained under the new interline intermodal service CN and CSX launched last week to link Montreal with New York, New Jersey, and Philadelphia.
“If sufficient demand for this CN system-CSX interline expedited intermodal service develops at a later time, new intermodal trains will operate between Montreal and the new interchange with CSX at Woodard, N.Y., but these trains would constitute organic rather than transaction-related traffic growth,” CN says.
About 45% of the carload traffic moving over the Massena line is through traffic linking Canada and the U.S.
CN says it will work with local customers to develop additional business on the line.
The railroad’s regulatory filing included a letter of support from Alcoa, which operates an aluminum smelter in Massena that is served by Genesee & Wyoming short line Massena Terminal Railroad. Massena Terminal also says it supports the line sale to CN, as did two members of the New York congressional delegation, Reps. John Katko and Elise Stefanik.
CN will boost employment on the line to 53 positions, up from 50 under CSX.
Under the terms of the deal, CN will not gain or seek connections to either the New York, Susequehanna & Western or the Finger Lakes Railway.
CN also will drop inactive trackage rights on the St. Lawrence Subdivision between Fort Covington, N.Y., and Massena. CN gained the trackage rights in 1989, when it sold the Huntington-Massena segment to Conrail.
CN on Aug. 29 announced it had reached a deal to acquire the Massena Line from CSX.
The line sale is part of CSX’s ongoing effort to spin off low-density routes that are not considered core to its system. The route was among those put out to bid last year.
