CPR and NSR Move to Improve Performance of Northeastern Rail
Network
CALGARY, Alberta, June 30 /PRNewswire-FirstCall/ -- Canadian Pacific Railway
(CPR) and Norfolk Southern Railway (NSR) today signed a memorandum of
understanding for an exchange of trackage rights, freight haulage and yard
services that will increase operational efficiency and enhance rail service to
customers.
CPR (NYSE:CP) Toronto announced in June 2003 it was restructuring its
northeastern U.S. operations and was seeking proposals for ways to increase
freight volumes, reduce operating costs and improve earnings. CPR's
northeastern U.S. network is operated as the Delaware and Hudson Railway.
"This agreement with NSR opens up new opportunity to move our northeastern U.S. franchise into a position of profitability," Rob Ritchie, President and Chief
Executive Officer of CPR, said. "We expect the changes will generate higher
traffic volumes and revenues, greater productivity and lower operating costs." David R. Goode, Norfolk Southern Chairman, President and Chief Executive
Officer, said, "This is an excellent example of railroads cooperating to better
serve our customers. We will be able to jointly provide transportation
solutions that will improve efficiency and quality of service for both carriers
in the northeast U.S." Under the agreement, CPR and NSR will consolidate freight marshalling at yards
in Buffalo and Binghamton, N.Y.: * CPR will cease yard operations in Buffalo, shifting all freight
marshalling to the NSR yard there.
* Similarly, NSR will shift its yard operations in Binghamton to CPR's
East Binghamton yard.
There are three major components to the new trackage rights and freight haulage
arrangements between CPR and NSR: * CPR will be able to move NSR freight traffic between Rouses Point and
Saratoga Springs, N.Y., under a haulage arrangement. NSR will operate
its own trains over CPR's line between Saratoga Springs and
Binghamton, N.Y., under a trackage rights arrangement. The
arrangements will generate higher revenue for CPR and provide NSR with
a substantially shorter route to Quebec and the Maritime provinces.
* CPR's freight traffic between Binghamton and Buffalo, N.Y., will move
in NSR trains under a haulage arrangement, replacing a trackage rights
agreement under which CPR operated its own trains between the two
cities. The arrangement will reduce CPR's operating costs and
generate additional revenue for NSR.
* CPR will operate over a new NSR route using existing rail lines
between Detroit and Chicago under a trackage rights agreement. It
will be the shortest rail route between the two cities and will
provide CPR with a faster, lower-cost lane.
"CPR's challenge remains to take this part of our network to a level of
profitability that will make it self-sustaining," Mr. Ritchie said. "We are
prepared to examine additional measures that, in concert with our NSR
agreement, will further optimize our assets and drive up profitability." New trackage rights arrangements and the discontinuance of trackage rights
require approval of the U.S. Surface Transportation Board.
Mr. Ritchie will hold a conference call with analysts and reporters today at
3:30 p.m. Eastern time to discuss details of the agreement with NSR. The
telephone numbers for the call are 1-800-814-4857 or 416-640-1907. Callers
should dial in 10 minutes prior to the call. A telephone replay of the call
will be available through July 7 at 1-877-289-8525 or 416-640-1917, pass code
21056014 followed by the pound key. The call will also be webcast live on
CPR's website, http://www.cpr.ca/. To access the webcast, click on Investor
Information and choose Investor Presentations. The webcast will be archived
through July 30.
Canadian Pacific Railway is a transcontinental carrier operating in Canada and
the U.S. Its 14,000-mile rail network serves the principal centres of Canada,
from Montreal to Vancouver, and the U.S. Northeast and Midwest regions. CPR
feeds directly into America's heartland from the East and West coasts.
Alliances with other carriers extend its market reach throughout the U.S. and
into Mexico. Canadian Pacific Logistics Solutions provides logistics and
supply chain expertise worldwide. For more information, visit CPR's website at
http://www.cpr.ca/.
Norfolk Southern Railway operates 21,500 routes miles in 22 states, the
District of Columbia and Ontario, serving every major container port in the
eastern United States and providing superior connections to western rail
carriers. NSR operates the most extensive intermodal network in the East and
is the nation's largest rail carrier of automotive parts and finished vehicles. For more information, visit NSR's website at http://www.nscorp.com/. DATASOURCE: Norfolk Southern Railway CONTACT: Media: Frank Brown, +1-757-629-2714, , or Investment Community: Leanne Marilley, +1-757-629-2861, , both of Norfolk Southern Railway; or Media: Len Cocolicchio, +1-403-319-7591, , or Investment Community: Paul Bell, +1-403-319-3591, , both of Canadian Pacific Railway Web site: http://www.nscorp.com/ http://www.cpr.ca/ Company News On-Call: http://www.prnewswire.com/comp/626525.html
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