Norfolk Southern will purchase 282.55 mils of rail line between Sunbury, Pennsylvania, and Schenectady, New York, from the Canadian Pacific Railway for $217 million, the company announced recently.
The rail line currently is part of the Delaware & Hudson Railway, a subsidiary of the Canadian Pacific. The sale is subject to the approval of the US Surface Transportation Board.
The purchase will allow Norfolk Southern to connect its network at Sunbury and Binghamton, New York, and give the railway single-line routes between Chicago and Albany, as well as to the southeastern United States. Norfolk Southern currently has an intermodal terminal in Mechanicville, New York.
The move also allows the railway to gain enhanced connection to its joint venture subsidiary Pan Am Southern, which services New England cities. The purchase includes the Delaware & Hudson’s car shop in Binghamton and other facilities located along the rail line.
The deal also would allow Norfolk Southern to retain and modify overhead trackage rights on the line between Schenectady, Crescent, Mechanicville, and Saratoga Springs. The D&H would retain local access to customers in Schenectady as well as main access to shippers in Buffalo.
Wick Moorman, Norfolk Southern’s CEO, said the move helps consolidate the railroads freight capabilities.
“Acquiring this portion of the D&H provides for more efficient rail transportation system by consolidating freight operations with a single carrier,” Moorman said. “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 network.”
The railroad has submitted an application to the Surface Transportation board. Both parties hope to have the deal concluded by the second quarter of next year.
“This deal is really a strategic extension of our existing lines,” said Norfolk Southern spokeswoman Deborah Butler. “If you look at the traffic that is moving there right now, about 80% of it is Norfolk Southern traffic anyway. So it is really a strategic move to align our traffic with usage of the line.”