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Canadian Pacific Kansas City (TSX:CP) (NYSE:CP) (CPKC) and Knight-Swift Transportation Holdings Inc. (NYSE:KNX) announced today a new multi-year agreement to provide truckload intermodal transportation service on CPKC's new single-line north-south corridor connecting Mexico, the United States and Canada. Knight-Swift is one of North America's largest and most diversified freight transportation companies, providing multiple truckload transportation and logistics services.
"This agreement creates compelling new transportation solutions for Knight-Swift's current and future customers looking for optionality and increased capacity in their supply chains," said John Brooks, CPKC Executive Vice-President and Chief Marketing Officer. "As Knight-Swift transition their Mexico-U.S. traffic to CPKC starting in mid-May, we will focus on growth between Chicago, Texas and Mexico markets."
Knight-Swift's established Mexico customer base will be able to leverage CPKC's broad network of rail lines, terminals, and cross-border efficiency and expertise to improve service reliability and competitiveness.
"Our agreement with the CPKC will provide another differentiated solution for our customers and their over-arching supply chains," said Adam Miller, Knight-Swift Transportation CFO and Swift President. "The Knight-Swift team is looking forward to engaging with the CPKC railroad on service offerings, customer solution design and demand planning to help facilitate growth on the first single-line railroad connecting Mexico, the United States, and Canada. Our Transmex team and growing LTL offering will also benefit from the newly created railroad and will allow us to continue supporting our customers in new and different ways by providing thoughtful solutions with a solid underlying service product."
CPKC's International Railroad Bridge over the Rio Grande River at the U.S.-Mexico border at Laredo, Texas, offers a reliable alternative to congested highway ports of entry. A second span to expand the bridge's capacity and further increase the efficiency of cross-border train movements is currently under construction and expected to be completed by the end of 2024.
Anticipated environmental benefits of CPKC include the avoidance of more than 1.6 million tons of greenhouse gas (GHG) emissions due to the expected improved operational efficiency of CPKC versus current operations and another 300,000 tons of GHG emissions with the diversion of 64,000 trucks to rail for a total reduction of 1.9 million tons of GHG emissions over the next five years. Diverting 64,000 long-haul truck shipments to rail annually with new CPKC intermodal services will reduce total truck vehicle miles travelled by almost 2 billion miles over the next two decades, saving US$750 million in highway maintenance costs.
