3 railroads join up to compete with CPKC to serve Mexico

A Union Pacific train engine sits in a rail yard on Sept. 14, 2022, in Commerce, Calif. Three major freight railroads, including Union Pacific, responded Monday, April 24, 2023, to the Canadian Pacific-Kansas City Southern merger with an agreement to work together on a competing service to carry shipments across North America. (AP Photo/Ashley Landis, File)

Canadian Pacific trains sit at the main CP Rail train yard in Toronto, March 21, 2022. The Canadian Pacific Kansas City railroad announced its first big business win Friday, April 21, 2023, with a multiyear agreement to handle the Schneider National trucking company's rail shipments to and from Mexico starting in mid-May. (Nathan Denette/The Canadian Press via AP, File)

A Canadian National Railway locomotive moves through the rail yard on March 29, 2018, in Dartmouth, Nova Scotia. Three major freight railroads, including Canadian National, responded Monday, April 24, 2023, to the Canadian Pacific-Kansas City Southern merger with an agreement to work together on a competing service to carry shipments across North America. (Andrew Vaughan/The Canadian Press via AP, File)

OMAHA, Neb. (AP) — Three major freight railroads responded Monday to the Canadian Pacific-Kansas City Southern merger with an agreement to work together on a competing service to carry shipments across North America.

Canadian National, Union Pacific and Grupo Mexico railroads said Monday that they will work together to quickly move intermodal cars filled with shipping containers from Mexico north across the United States to the key hub of Chicago and further north into Canada.

The new service will directly compete with CPKC's new single-line network that is the only railroad directly connecting all three countries. The three railroads said Monday they believe their service will be superior to CPKC because Grupo Mexico has a bigger rail network in Mexico and Union Pacific has a more direct route north to Chicago.

“This is a steel wheel interchange service that leverages the best of our three networks and creates the most direct route and fastest transit time between Canada and Mexico,” CN CEO Tracy Robinson told investors during a conference call Monday.

The new offering from the three railroads comes just days after CPKC announced a major agreement with the Schneider National trucking firm to become the preferred railroad to handle that company's intermodal shipments to and from Mexico. CPKC didn't immediately respond to the other railroads Monday.

All the railroads say they hope their offerings will be able to persuade companies to ship more of their products by rail instead of truck, which they say will reduce greenhouse gas emissions because railroads are more efficient over long distances. That’s the long-term goal, but initially they may be fighting between each other over some of the same traffic.

Union Pacific CEO Lance Fritz said the new service should help support the railroads’ goals to reduce carbon dioxide emissions.