CN Signs Midwest Access Deal for Kansas City Neff Yard

MONTREAL, Canada – In 2025, CN and Union Pacific Railroad signed two memorandums of understanding that would give CN new access to Illinois, Missouri, and Kansas City shipper facilities if the Surface Transportation Board approves the proposed UP–Norfolk Southern merger. The agreements include CN dropping its opposition to that merger and acquiring NS ownership interests in the Kansas City Terminal Railway Co. and the Terminal Railroad Association of St. Louis. No financial terms or exact implementation date were disclosed.

What Is the Full Scope of This Development?

CN and UP signed two MOUs covering competitive access in the U.S. Midwest, with the first MOU contingent on STB approval and closing of the UP–Norfolk Southern merger. CN would gain access to shipper facilities where Class I options would fall from three to two or from two to one, overhead rights between Tuscola and East St. Louis, Illinois, and between St. Louis and Kansas City, Missouri, and usage of Union Pacific’s Neff Yard in Kansas City. CN would also acquire Norfolk Southern’s ownership interests in the Kansas City Terminal Railway Co. and the Terminal Railroad Association of St. Louis. Additional reporting indicates the package includes expanded operating rights over CN’s Elgin, Joliet & Eastern Railway corridor around Chicago and new rights over Union Pacific’s network between Memphis, Tennessee, and Eagle Pass, Texas, plus reaffirmed gateway protections (Source: StockTitan, 2025). The second MOU’s full terms were not separately itemized in the initial announcement.

Key Development Data

How Does This Compare to Industry Trends?

Access conditions attached to Class I mergers in the U.S. Midwest have previously included trackage rights and gateway protections when merger review identifies 2-to-1 competition loss. In the 2021–2023 Canadian Pacific–Kansas City Southern proceeding, the Surface Transportation Board required conditional access and bridge-gateway measures to preserve competition in overlapping corridors before approving the first new Class I combination since the 1990s (Source: U.S. Surface Transportation Board, 2023). The CN–UP MOU uses the same regulatory lever—a private settlement to resolve objections—rather than full merger block. Separately, North American rail infrastructure and fleet modernization investment is projected to reach USD 8.9 billion in 2026, indicating that capacity and network access remain growth priorities alongside consolidation (Source: StartUs Insights, 2025).

Editor’s Analysis

CN’s willingness to swap merger opposition for terminal ownership and corridor rights in Kansas City and St. Louis is a strategic trade: it converts a defensive regulatory position into a physical operating footprint at two critical Midwest gateways. The reported Memphis–Eagle Pass and Chicago EJ&E additions suggest the final access deal may be broader than the two MOUs initially disclosed, which could strengthen CN’s north-south intermodal corridor if the UP–NS transaction closes. With North American rail investment projected at USD 8.9 billion in 2026 (Source: StartUs Insights, 2025), access to gateways is becoming an asset worth litigating less and trading more.

FAQ

Q: What does CN receive under the two memorandums of understanding?
A: CN receives access to specific shipper facilities, overhead rights in Illinois and Missouri, use of Union Pacific’s Neff Yard in Kansas City, and acquisition of Norfolk Southern’s ownership interests in the Kansas City Terminal Railway Co. and the Terminal Railroad Association of St. Louis.

Q: When do the access rights take effect?
A: The first MOU is dependent on Surface Transportation Board approval and closing of the proposed UP–Norfolk Southern merger. No separate implementation date has been officially disclosed.

Q: Does this agreement mean the UP–NS merger will definitely be approved?
A: No. CN has agreed not to oppose the merger under the MOU framework, but STB approval is still required and the merger has not been officially confirmed as approved as of publication.