CN-NS interline service is seeing solid early returns

The joint interline service formally rolled out in October by Class I railroad carriers CN and Norfolk Southern appears to be off to a good start so far.

That was the word from CN Executive Vice President and Chief Marketing Officer Jean-Jacques Ruest at last week’s RailTrends conference in New York, which was hosted by Progressive Railroading magazine and independent railroad analyst Tony Hatch.

This joint interline service, which has been in effect since August, is focused on a Chicago bypass for carload traffic between Western Canada and Norfolk Southern’s Eastern-based U.S. destinations.  CN and NS officials said in October that this endeavor would reduce transit times for these routes by one to two days.

“We exchange about two trains a day with NS in both directions around Chicago,” said Ruest. “And we have made some tradeoffs, too, with a really good interchange seeing some parties picking up costs and others saving some costs. The customer is always winning on the over all transit time improvements, as well as avoiding congestion. There is something in it for everyone, especially for customers with more carload growth. We are operating with NS as one for this, and it is an easier way to try to remove some of these corporate barriers that we have. It was great to be able to put this together and enhance the value of carload services.”

Perhaps the biggest benefit of this service is that freight is able to avoid, or bypass, traditional interchange points in Chicago, long the most major congestion spot for railroad and intermodal cargo in the U.S. According to a Wall Street Journal report, the Belt Railway Co.’s 265 miles of tracks around the Chicago area switch about one million railcars a year, making Chicago the busiest interchange in North America, as well as being frequently cited by railroad executives as a congestion-heavy pinch point that often leads to delays.

By using existing CN and NS routes, transit times have been cut by up to 48 hours, with rail shippers seeing gains in final destination delivery efficiency, with CN and NS now interchanging two eastbound and two westbound manifest trains through greater Chicago on a daily basis. This is being done by connecting CN’s Western Canada network and the NS Eastern U.S. network, with traffic interchanging at the NS rail yard in Elkhart, Indiana, which, in turn, avoids extra handlings in the Chicago terminal, they said.

Tony Hatch, principal of ABH Consulting, observed in an October research note that this endeavor represents not only a symbol but also a reality of rail cooperation, adding that it also is “creating an alternative the rather cynical ‘mergers are required’ solve interline problems [and] create opportunities groupthink.”