Regulators approve the acquisition of Meridian & Bigbee by CPKC and CSX

WASHINGTON – The Surface Transportation Board has approved Canadian Pacific Kansas City and CSX Transportation’s acquisition of Genesee & Wyoming-based Meridian & Bigbee Railroad, allowing the two Class I lines to create a new direct connection in Myrtlewood, Ala.

The approval takes effect on November 16, 2024.

In separate decisions, the board conditionally approved CSX’s acquisition of 93.7 miles between Burkville and Myrtlewood, Ala., and CPKC’s acquisition of 50.4 miles between Myrtlewood and Meridian, Miss. (The decision regarding the CSX portion is available here , while the decision for the portion on CPKC is here .) Both decisions were made on a 4-0 vote, although board members Patrick Fuchs and Michelle Schultz indicated separate agreements in both cases .

CPKC and CSX announced the plan – which creates a transit route connecting the Southeast with Texas and Mexico, and improves CSX’s access to Mexico via CPKC – in June 2023 (see “CPKC and CSX to Create Direct Exchange…,” Trains Newswire, June 28, 2023). Details were set out in documents filed with the STB in October 2023 seeking approval of the transaction. CSX will resume operations on the Burkeville-Myrtlewood segment, which it had leased to the Meridian & Bigbee, while CPKC will take over the Myrtlewood-Meridian segment, although the Meridian & Bigbee will continue to provide local service on that portion (see “CPKC- and CSX details their plans to connect…,” News Wire, October 11, 2023). The railroads say they expect one pair of trains to be exchanged daily for the first five years.

The board said the deal was unlikely to lead to “a substantial reduction in competition, the creation of a monopoly or a restriction of trade,” and that even if there were “some limited anticompetitive effects, these would be outweighed by the public interest in the deal’. meeting significant transportation needs.” It will create a more efficient rail service – via shorter, more direct routes – and increase competitiveness, the decision said.

The decisions require CSX to retain its Selma, Ala., gateway and provide one shipper with access to Norfolk Southern in Slema at the Meridian & Bigbee rate for five years, subject to reasonable cost escalation. It also includes conditions to protect employees affected by line sales and requires noise mitigation efforts related to the CSX portion. However, the board did not grant any terms requested by Canadian National Railway or Amtrak in the CPKC portion of the transaction.

CN requested that CPKC be required to report all traffic crossing the CN line in Jackson, Miss., on CPKC trains so that the board could consider additional orders if congestion develops. The board declined, saying that the expected number of trains per day would not impact service on CN, and that CN could raise the issue with the board in the future if a problem arises. Amtrak attempted to limit the length of freight trains on the “Meridian Speedway” between Meridian and Shreveport, La., to the length of available sidings because of the problems that trains of too long a length can cause for passenger traffic. The board refused because, although that would freeze current operating practice, CPKC argued that there were situations where over-length trains could make sense and could run without potential risk of disrupting passenger trains.

Norfolk Southern initially sought additional terms but withdrew that request after what it called “productive discussions between the parties and recent developments.”