Regulators approve CPKC, CSX acquisition of Meridian & Bigbee

WASHINGTON — The Surface Transportation Board has approved acquisition by Canadian Pacific Kansas City and CSX Transportation of the Meridian & Bigbee Railroad from Genesee & Wyoming, allowing the two Class I lines to create a new direct connection at Myrtlewood, Ala.

The approval is effective Nov. 16, 2024.

In separate decisions, the board approved with conditions 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 involving CPKC is here.) Both decisions were by 4-0 votes, although board members Patrick Fuchs and Michelle Schultz offered separate concurrences in both cases.

CPKC and CSX announced the plan — which creates a through route linking 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 interchange …,” Trains News Wire, June 28, 2023]. Details were outlined in filings to the STB in October 2023 seeking approval of the transaction. CSX resumes operations of the Burkeville-Myrtlewood segment, which it had leased to the Meridian & Bigbee, while CPKC acquires 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, Oct. 11., 2023]. The railroads say they anticipate interchanging one pair of trains daily for at least the first five years.

The board said the deal was not likely to case “a substantial lessening of competition, the creation of a monopoly, or restraint of trade,” and that even if there were “some limited anticompetitive effects, they would be outweighed by the public interest in meeting significant transportation needs.” It will create more efficient rail service — through shorter, more direct routing —and increase competitive options, the decision states.

The decisions require CSX to maintain its Selma, Ala., gateway and to provide one shipper access to the Norfolk Southern at Selma at the Meridian & Bigbee’s rate for five years, subject to reasonable cost escalation. It also includes conditions protecting employees affected by the line sale, and requires noise mitigation efforts regarding the CSX portion. However, the board did not grant conditions sought 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 supplemental orders if congestion results. The board declined, saying the anticipated one train pair per day should not impact service on CN, and CN could raise the issue with the board in the future if an issue arises. Amtrak sought to limit freight train lengths on the “Meridian Speedway” between Meridian and Shreveport, La., to the length of available sidings, because of the issues overlength trains can cause for passenger operations. The board declined because, while that would freeze in place current operating practice, CPKC argued there were situations where overlength trains could make sense and could operate without potential risk of interfering with passenger trains.

Norfolk Southern originally sought additional conditions, but withdrew that request following what it called “productive discussions among the parties and recent developments.”