Norfolk Southern and the Delaware & Hudson propose rail line transaction

Written by Jenifer Nunez, assistant editor

Norfolk Southern and the Delaware & Hudson Railway (D&H), a subsidiary of Canadian Pacific, have proposed a transaction under which NS would acquire 282.55 miles of D&H rail line between Sunbury, Pa., and Schenectady, N.Y. The $217-million is subject to the approval by the U.S. Surface Transportation Board.

 

“Acquiring this portion of the D&H provides for more efficient rail transportation system by consolidating freight operations with a single carrier,” said NS Chief Executive Officer Wick Moorman. “Aligning the D&H track with Norfolk Southern’s 22-state network allows us to connect businesses in central Pennsylvania, upstate New York and New England with domestic and international markets while enhancing the region’s competitive rail and surface transportation market.”

The lines to be acquired connect with NS’ network at Sunbury, Pa., and Binghamton, N.Y., and would give NS single-line routes from Chicago and the southeastern United States to Albany, N.Y., and NS’ recently built Mechanicville, N.Y., intermodal terminal. NS also would gain an enhanced connection to its joint venture subsidiary Pan Am Southern, which services New England markets. Additionally, NS would acquire D&H’s car shop in Binghamton along with other facilities along the corridor.

“As we have stated in recent months, we’ve been in the process of negotiating the final details for the potential sale of the southern portion of our D&H line,” said CP Chief Executive Officer E. Hunter Harrison. “We are pleased to find a prospective buyer in Norfolk Southern.”

As part of the transaction, NS would retain and modify overhead trackage rights on the line between Schenectady, Crescent and Mechanicville, N.Y., as well as Saratoga Springs, N.Y. The D&H would retain local access to serve customers in Schenectady and would maintain its access to shippers in Buffalo.

NS intends to retain its current employees and offer employment to about 150 D&H employees currently working in this area. Any adversely affected employees will be entitled to standard labor protections.

“This acquisition would preserve good-paying railroad jobs and set the stage for economic growth,” said John Friedmann, NS vice president of strategic planning. “Absent this transaction and its efficiencies, we are concerned that rail service along much of New York’s Southern Tier would be threatened with losing a crucial link to New England.”

NS has submitted an application for the transaction to the U.S. Surface Transportation Board. The rail companies are proposing a schedule that would lead to approval during the second quarter of 2015.

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