CN, UP, and Ferromex are teaming up for new intermodal service linking Detroit and Canada with Mexico. CN/UP/FXE
railroads to sharpen their pencils to build an improved schedule. In the end our customers will vote with their business and choose the service they value. That’s what healthy competition is all about.”
Falcon Premium will connect a dozen CN terminals with the Ferromex terminals in Monterrey and Silao via the Eagle Pass, Texas, gateway. CN and UP will use steelwheel interchange to exchange the traffic in Chicago via CN’s former Elgin, Joliet & Eastern Chicago bypass route.
“CN will now have the shortest route and fastest service to all of its key markets. Layering this new service with our new EMP product with the UP and NS, CN’s customers will have new options to convert truck volumes to rail,” Doug MacDonald, CN’s chief marketing officer, told investors and analysts on the railway’s earnings call last week.
CN will essentially be tying its intermodal network to existing Chicago-Mexico service that UP and Ferromex currently offer. CN believes there are two trains’ worth of volume moving in each direction every day via truck, based on market research conducted as part of its ill-fated attempt to acquire Kansas City Southern. The potential traffic includes automotive parts, food, freight all kinds, home appliances, and temperature-controlled products, the railroads said.
In October, CN became a full partner in the UP-Norfolk Southern EMP container pool, which MacDonald says will benefit the Falcon Premium service by providing equipment that intermodal marketing companies can use. UP in October booted Canadian Pacific out of the EMP program in advance of the CP-KCS merger.
Last month CPKC landed a multi-year contract to handle Schneider National’s intermodal traffic between the U.S. and Mexico. It also will handle some of Knight-Swift’s cross-border intermodal traffic. Schneider and Knight-Swift currently move their Chicago-Mexico traffic via UP.
CPKC’s ability to provide single-line service is a “pretty dramatic opportunity,” Jim Filter, Schneider’s group president of transportation and logistics, said on the company’s earnings call last week.
Each interchange, he says, is a potential point of failure. “What the CPKC has created is a single rail delivery going from our three ramps in Mexico directly up to the Midwest,” Filter says.
He also expects CPKC to improve service on the former KCS portion of the route from Kansas City to Laredo and down into Mexico. “This is an area that has struggled with service,” Filter says.
“We’d expect to see a pretty dramatic improvement on the former KCS,” he says.