April 24, 2023 - TRA Newswire -

A second cross-border rail alliance is born this month

Hot on the heels of the recent merger of Canadian Pacific and Kansas City Southern, now called CPKC, which created a North America funnel for freight rail traffic, Union Pacific, Canadian National and Grupo Mexico Transportes (GMXT) have formed an alliance to compete for cross-border rail traffic.

The creation of Falcon Premium intermodal service, announced today, will offer a Mexico-US-Canada seamless rail connection in Chicago, Illinois. It will directly connect all CN origin points within Canada and Detroit, Michigan to GMXT terminals in Mexico: Monterrey, Nuevo Leon, and Silao, Guanajuato funneled through Union Pacific routes in Texas. This service can benefit intermodal customers shipping automotive parts, food, FAK (freight all kinds), home appliances, and temperature-controlled products.

The seamless service will leverage GMXT’s transit times between Silao, Guanajuato, and Eagle Pass, Texas; Union Pacific’s route from Texas to Chicago and CN’s service connecting Chicago to all points in Canada through the EJ&E Chicago bypass.

This new and innovative service should allow the maximization of lading weights between Mexico/Canada for greater efficiency for customers. Falcon Premium intermodal service should significantly cut the truck-to-rail delays through the Chicago rail complex.

“Falcon Premium service is a game changer for intermodal customers. By leveraging each partner's best services and routes, we are creating a transformational new product", according to Tracy Robinson, President and Chief Executive Officer, CN. "Our commitment is to run this service with the utmost focus to maximize speed, reliability, and customer satisfaction. This service is an example of how collaboration and cooperation can improve supply chains for customers.”

Lance Fritz, Chairman, President and CEO, Union Pacific said “This bold, creative venture harnesses the strengths of three companies to provide best-in-class service to our customers in three countries, while supporting our climate goals. We are excited to be a part of this new intermodal service connection, which leverages our unmatched route into and out of Mexico and strengthens our intermodal service portfolio.”

"GMXT has a long-standing commitment of being part of the logistics solutions that North America requires to boost the economic growth in the region, through its rail service. The Falcon Premium service is tailor-made with the objective of providing new solutions to customers catering to the requirements of nearshoring demands.” That statement came from Fernando López, Chief Executive Officer, GMXT.

Bad weather and inflation contributed to an off first-quarter

This week Union Pacific Corporation reported 2023 first quarter results with business volume, measured in revenue carloads, down 1% over the same period last year.

“We delivered greater network fluidity and resiliency in the first quarter even as we faced a series of significant weather events,” said Lance Fritz, Union Pacific chairman, president, and chief executive officer. “In addition to the impact of weather on carload volumes and costs, higher inflation also reduced our operating income and more than offset our record first quarter operating revenue. Despite a continued challenging environment, our strengthening service product, bolstered by a strong pipeline of new employees, gives us confidence we can capture available demand and improve efficiency the remainder of the year.”

Operating revenue of $6.1 billion was up 3% driven by higher fuel surcharge revenue and core pricing gains, partially offset by a negative business mix and volume declines. Operating income of $2.3 billion declined 3%. The company repurchased 2.9 million shares in first quarter 2023 at an aggregate cost of $0.6 billion. Quarterly freight car velocity was 196 daily miles per car, a 1% decline. Quarterly locomotive productivity was 123 gross ton-miles (GTMs) per horsepower day, a 5% decline. Average maximum train length of 9,159 feet was flat. Quarterly workforce productivity decreased 6% to 991 car miles per employee.