CSX and Canadian National to form new intermodal service

Canadian National (NYSE: CNI) and eastern U.S. rail company CSX (NYSE: CSX) have announced plans to offer new intermodal service between the CSX-served ports of Philadelphia, New York and New Jersey and CN’s areas of greater Montreal and southern Ontario. 

The service, which will begin on October 7, 2019, provides both rail companies with access to markets that each company has been vying for in recent years. Canadian National has expressed interest in recent months to fortify its presence in eastern Canada, including making plans to invest its resources at the ports of Halifax and Quebec. Meanwhile, CSX said this week that the service will provide CSX with access to Toronto and Montreal via CN’s intermodal yards. 

The new intermodal service will compete against trucks by converting shipments from over-the-road service to rail, which is typically less expensive.The service also might provide rate relief to ocean carriers moving goods between Montreal and the Port of New York and New Jersey.

“Answering a need expressed by our customers, this new service positions us to capture market share from trucks and increases capacity in these expedited lanes, as larger container ships call at the Port of Philadelphia and Port of New York and New Jersey,” said CSX chief executive officer Jim Foote.