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Further strengthening ties forged during their ill-fated merger proposal, Burlington Northern Santa Fe and Canadian National on November 15 announced a marketing agreement that aims to streamline the pricing process and grab carload freight business currently handled by trucks.
Under the deal, which will be introduced first on the I-5 corridor between Western Canada and the U.S. West Coast, the railroads will be able to market and price new carload business involving both railroads' lines. Currently, shippers seeking a quote for a joint line move have to wait for both railroads to price the shipment, which takes time and turns shippers off.
The I-5 corridor agreement includes stations on CN in western Canada and on BNSF in the western U.S. Stations on this route include BNSF-served points in Arizona, California, Idaho, New Mexico, Nevada, Oregon, Utah, and Washington, and El Paso-Sierra Blanca, Texas; and CN-served points in Alberta, British Columbia, and Saskatchewan.
The corridor was chosen because BNSF and CN, as part of the merger they proposed last year, had examined how to mesh operations and increase business there. "It's one we had done a lot of homework on as part of that process," says BNSF spokesman Pat Hiatte.
"It's really intended to extend market share of both carriers," says CN spokesman Mark Hallman. And that's just what BNSF has been trying to do on its underutilized I-5 corridor.
Other corridors will be identified and added to the program, although the railroads wouldn't say when or where. Joint marketing agreements are fairly common. CN, for example, is a partner with Kansas City Southern in handling Mexico-U.S.-Canada traffic.
But what sets this deal apart, BNSF and CN say, is the breadth of coverage, which includes three provinces and nine states.
Last month, BNSF and CN announced a service agreement that provides agricultural products customers with new service using BNSF and CN routes in Illinois and Iowa. Under that agreement, CN is providing haulage service for BNSF between East Dubuque, Ill., and Cedar Rapids, Iowa, and BNSF is providing haulage service for CN between East Dubuque, Peoria and Centralia, Ill. The railroads are also partners in a new RoadRailer service linking Los Angeles and Montreal, for which BNSF has acquired trackage rights for RoadRailer trains only on CN's Grand Trunk Western in Chicago (see item below).
The deals, and others like them to come, no doubt smooth operations and enable the railroads to increase business beyond the 250,000 carloads they now handle jointly per year. But they also may eventually enable BNSF and CN to dust off their merger plans and give regulators proof that they could merge without creating the massive service disruptions that have accompanied other recent mergers. (Source: Trains Magazine)
