CN, NS partner up for joint interline service offering focused on a Chicago bypass

Late last week, Class I railroad carriers CN and Norfolk Southern announced they have partnered up on a new joint interline service offering for carload traffic between Western Canada and NS’s Eastern-based U.S. destinations.  CN and NS officials said that this endeavor will reduce transit times for these routes by one to two days.

Perhaps the biggest benefit of this service, which has been intact since August, is that freight is able to avoid, or bypass, traditional interchange points in Chicago, long the most major congestion spot for railroad and intermodal cargo in the U.S. According to a Wall Street Journal report, the Belt Railway Co.’s 265 miles of tracks around the Chicago area switch about one million railcars a year, making Chicago the busiest interchange in North America, as well as being frequently cited by railroad executives as a congestion-heavy pinch point that often leads to delays.

By using existing CN and NS routes, transit times have been cut by up to 48 hours, with rail shippers seeing gains in final destination delivery efficiency, with CN and NS now interchanging two eastbound and two westbound manifest trains through greater Chicago on a daily basis. This is being done by connecting CN’s Western Canada network and the NS Eastern U.S. network, with traffic interchanging at the NS rail yard in Elkhart, Indiana, which, in turn, avoids extra handlings in the Chicago terminal, they said.

Top executives at both NS and CN are optimistic about this new service.

“Together, CN and NS have re-engineered our Chicago connections to provide shippers with a new superior-service shipping option” said Jim Squires, Norfolk Southern chairman, president and chief executive officer, in a statement. “Customers on both railways are seeing faster and more reliable service, benefitting their supply chains.”

And Luc Jobin, CN president and chief executive officer, said in a statement that: “Through collaboration, CN and NS are bringing more efficiencies to the supply chain as we deliver higher and more reliable levels of service to our customers.”

Tony Hatch, principal of ABH Consulting, observed in a research note that this endeavor represents not only a symbol but also a reality of rail cooperation, adding that it also is “creating an alternative the rather cynical ‘mergers are required’ solve interline problems [and] create opportunities groupthink.”