MONTREAL – Canadian National will purchase CSX Transportation’s line linking the Syracuse, N.Y., area with Montreal. The deal comes just weeks after the railroads announced they would begin joint intermodal service this fall linking Toronto and Montreal with New York, New Jersey, and Philadelphia.
“CN is excited to be expanding its reach in New York,” CN CEO JJ Ruest said in a statement. “With this acquisition from CSX, we are opening up new opportunities for our existing customers and local businesses who will be able to access new markets through CN’s unique three coasts network. By acquiring the Massena rail line, CN continues to expand our network and foster additional supply chain solutions. CN is pleased to welcome communities along the Massena rail line to its family and we look forward to meeting our new neighbors.”
Terms of the deal were not disclosed.
The line sale, announced on Thursday, is part of CSX’s ongoing effort to spin off low-density routes that are not considered core to its system. The route was among those put out to bid last year.
“An estimated 60 employees will be impacted by the transaction, and we are working with them to provide support throughout the transition,” CSX said in a statement. “We are confident in the ability of CN to provide safe and effective service for our valued customers on the Massena Line. The transaction is subject to regulatory approval.”
The deal will not allow CN to directly interchange with short line New York, Susquehanna & Western in Syracuse, according to people familiar with the matter.
The 40-mph CSX Saint Lawrence and Montreal subdivisions total more than 220 miles of track. CN said the line purchase includes trackage from Valleyfield, Quebec, to Woodard, N.Y., which is just north of Syracuse and is a connection with the former New York Central Water Level Route.
The new intermodal service set to begin on Oct. 7 will ride existing trains that CSX and CN use for interchange at Buffalo, N.Y., and Huntingdon, Quebec. The line sale will give CN a reasonable revenue division on the intermodal traffic to and from Montreal, which otherwise would have run only a few miles on CN rails.
The Massena Line currently sees one CSX manifest train in each direction linking Montreal and Selkirk, N.Y., plus locals. CN officials view the purchase as a growth opportunity.
But it’s also seen as a defensive move that eliminates the possibility of another railroad using CSX’s failed intermodal terminal in Valleyfield, Quebec. The $100 million terminal, which opened in 2015 but never lived up to volume expectations, will officially close in October.
In 2015 CN and Montreal economic officials raised concerns over $11 million in subsidies CSX received from Quebec to build the terminal, which was viewed as a threat to the Port of Montreal.
This is not the first time CN has been interested in the Massena line. When CSX and Norfolk Southern were carving up Conrail in the late 1990s, CN sought to have the line divested so it could create a Montreal-New Jersey route in conjunction with the NYS&W.
— Updated at 8 a.m. CDT on Aug. 30 with additional details.
Charles Izzo you are correct with youre assumption of the old Delaware & Hudson tracks that go threw Rouses Point are the most direct way to get to NY . NJ. from Montreal and its own owned by Canadian Pacifica where they run trains also Amtrak trains to the port of Albany with a connecting track that hooks up to CSX,s main yard in Selkirk NY. which leads to the river sub line along the Hudson down to NJ. Yes going from Montreal threw Syracuse is dumb ,not at all a straight line from point A to point B .
Why do I have to sign in for each time I want to read news wire?
A good investment for people is in the DeLorme atlases of individual states. These maps show contours (the on-line GPS drivel doesn’t) and while there are errors galore in DeLorme’s NY Atlas on RR’s it is still usable; I’ve worn out my first one. The SPV Comprehensive Railroad Atlases are another welcome addition for showing where lines are–and were; you should have ordered a complete set years ago. SPV has corrected many of their few errors (Pittsburg & Lehigh Jct. is NOT the BR&P crossing over the LV–it was a diamond) and they finally started covering interurbans. Railroads are forced to follow contours and also go where the business is; for various historical reasons and other things there’s a lot of “openess” in northern NY. That is why the lines often don’t follow straight lines. Supposedly the Duke of Wellington himself said that “a straight railroad line is a good thing to have, but not if you have to pay any money for it.”.
When I draw a straight line between Montreal and NYC it seems to pass thorugh Albany, not Syracuse. CP i think owns the D&H tracks from Montreal to Albany I think they only use threm for the Amtrak train. Why do railroads run in circles instead of stright lines. They are constantly ignoring thier biggest advantage over trucking.
I put my money (lierally) with the railroad that wants growth……CN!
It will be interesting to see if CN uses the current CSX connection to it’s main near Valleyfield or will they resurrect the unused (original New York Central) trackage from there to Adirondack Junction to access their Montreal Intermodal Yard?
I seem to recall Grand Trunk once owned the trackage east of Massena into Quebec.
I see little upside for CSX on this. They are short-hauling themselves from both directions with this sell-off.
On second thought, one upside is reduced confiscatory taxes by the Kommisar of NY.
Map, please.
Let’s be honest. The stock price has dropped by $15.00 in the last few weeks. The hedge funds are in a panic and their solution is to cut cut cut. Remember, with 0 customers and 0 employees the operating ratio will also be 0 and think of how much profit that is……right?
CSX and BNSF and?
I was wondering about the Oswego branch, but it turns out that’s what the connection is at Woodard. So CSX is keeping the RWO from Syracuse to Woodard, and on up to Oswego, and it makes sense since that branch might be a strange appendage for CN.
And CN gets one step closer to the NY market. CSX = death by a thousand short line sales.
If you paid attention to the joint CN-CSX joint intermodel services announcement about week, you knew that this was coming.
@Todd Stevenson
CP not CN
I agree with Jim. There is writing on the wall for an eventual takeover. The third largest railroad in the US that was operating in the black, was hijacked by E Hunter Harrison former CEO of CN (that had an untimely death within a year of taking over), and current CEO Jim Foote that followed Mr Harrison from CN. Mr. Foote continued with the implementation of precision schedule railroading, and a slowly selling off large sections of track from Florida to Canada, weather is to another railroad or a housing complex. CN had previously attempted a hostile takeover of CSX, which was thwarted, while Mr Harrison was its CEO…. Sometime in the not so distant future CSX stock will fall and she will be sold to the CN. While I truly hope this eventuality is just a pipe dream from the employees CSXT, only time will tell.
Very little local traffic, Timothy. It’s in the best interest of the St. Lawrence Subdivision for the other interchange partner that’s in a growth stage and receives or loads most of the traffic over the line, to take it over now that the other partner wants out of it.
Survival as well as future growth depends on it remaining a bridge route. But if neither party had a vested interest in running the property and making money off it, that traffic for some 3rd party could evaporate overnight, just as it almost did a decade ago when CSX received permission to reroute the line’s traffic over CPR’s Delaware & Hudson before having a change of heart and pouring millions into the line to go after traffic on the I-81 corridor.
For instance north of the Watertown/Fort Drum area, I believe it’s down to just the endangered Alcoa West traffic off the Massena Terminal Railroad, a feed mill in Canton, polluted soil from the former GM site in Massena on what will soon be a long inactive siding once remediation is done since Alcoa East is now permanently shuttered, two online paper mills in Potsdam and Gouverneur (The latter of which as of last winter wasn’t actively using their siding, judging by the large snowbanks on each side of the Route 11 crossing), a small steel fabricator in Gouverneur, and a few hundred carloads a year off the New York & Odgensburg from the Norfolk paper mill and the port of Ogdensburg. The Gouverneur mine branch doesn’t see much traffic these days and may even be inactive at this point.
That’s a lot of railroad north of Watertown for perhaps 5,000 local carloads a year and if Alcoa West goes, well over 4,000 of those loads will immediately vanish. 95% of current and potential business is through traffic flowing between CSX and Canadian National across the border. So it makes sense that it’s in the best interest of the line if one of those two parties wants to slim down, that the other interchange partner that’s now actively growing and seeking new opportunities takes it over.
Paul,
I seriously doubt traffic to/from New York and New Jersey will move via Haliax. Would be MUCH cheaper and probably as quick to simply sile to NY/NJ.
Long term with supply chains shifting to SE Asia and India, Halifax is the closest sail to the Suez Canal. Consumer goods from SE Asia and India heading to New York-New Jersey will get there via Halifax-Syracuse doublestack Service interchanged to CSX. This is similar to the CSX agreement with BNSF for LA-Atlanta traffic.
WHY ??
Good news