Railroad companies Canadian Pacific Kansas City (CPKC), CSX and Genesee & Wyoming Inc. (G&W) announced June 28 that the three sides had reached an agreement that will create a new direct CPKC-CSX railroad interchange connection in Alabama.

As part of the proposed transactions, CPKC and CSX would each acquire or operate portions of Meridian & Bigbee Railroad (MNBR), a railway running through Alabama and Mississippi that is owned by G&W, establishing a new freight passageway that connects Texas, Mexico and the southeastern United States.

Under the agreement, CPKC would acquire and operate a segment of railway that runs from Meridian, Mississippi to Myrtlewood, Alabama while CSX would be given operational control of rail lines being leased by MNBR that are east of Myrtlewood. As a result, a direct CPKC-CSX interchange would be created in Alabama. In exchange, Genesee & Wyoming would take control of select Canadian properties owned by CPKC. Simultaneously, MNBR would be given the right to continue to provide local services to existing customers on former MNBR-owned rail lines.

“This strategic acquisition will bring more shipping options to intermodal, automotive and other customers by providing a new, efficient corridor connecting expanding markets in Mexico, Texas and the U.S. Southeast,” said Keith Creel, the president and CEO of CPKC. “With this new east-west connection taking advantage of each railway's routes and service, we can extend our reach, converting more freight traffic to rail and off our highways.”

At this time, the financial details of the transaction have not yet been disclosed. Also, certain parts of the transactions are still pending approval from regulatory bodies like the U.S. Surface Transportation Board.