(The Canadian Press distributed the following article on July 1.)
CALGARY — Canadian Pacific Railway hopes to save $15 million a year in a deal to share tracks and consolidate rail yard operations in the northeastern U.S. with Virginia-based Norfolk Southern Railway. The memorandum of understanding announced yesterday will give Calgary-based CP Rail the ability to operate a new route between Detroit and Chicago, providing the shortest rail route between the two cities.
CP Rail will close its yard operations in Buffalo, N.Y, and use the Norfolk Southern yard while the two railways will use Canadian Pacific’s yard in Binghampton, N.Y.
The railways will also share other tracks in upstate New York and move each others’ freight traffic in a bid to cut operating costs.
“This agreement with (Norfolk Southern) opens up new opportunity to move our northeastern U.S. franchise into a position of profitability,” CP Rail’s chief executive Rob Ritchie said yesterday.
CP Rail said the arrangement will cost the company $10 million over the next 18 months for up-front capital costs.