MONTREAL — Canadian National, Union Pacific, and Ferromex will launch new intermodal service next month linking Canada and Detroit with Mexico, the railroads announced today (Monday, April 24).
The Falcon Premium service will connect a dozen CN terminals with the Ferromex terminals in Monterrey and Silao via the Eagle Pass, Texas, gateway. CN and UP will use steel-wheel interchange to exchange the traffic in Chicago via CN’s former Elgin, Joliet & Eastern Chicago bypass route.
“CN will now have the shortest route and fastest service to all of its key markets. Layering this new service with our new EMP product with the UP and NS, CN’s customers will have new options to convert truck volumes to rail,” Doug MacDonald, CN’s chief marketing officer, told investors and analysts on the railway’s earnings call on Monday.
CN will essentially be tying its intermodal network to existing Chicago-Mexico service that UP and Ferromex currently offer. The Falcon service will be six to eight days faster than current CN routing options to Mexico, MacDonald says.
Falcon Premium’s transit times from Monterrey to Toronto will be eight days from cutoff to availability, according to schedules posted on the UP website.
MacDonald says UP and Ferromex provide the best intermodal service offering between Chicago and Mexico. “It’s been phenomenal,” he says. “The customers rave about it.”
CN believes there are two trains’ worth of volume moving in each direction every day via truck, based on market research conducted as part of its ill-fated attempt to acquire Kansas City Southern. “We’re targeting that business,” MacDonald says.
The potential traffic includes automotive parts, food, freight all kinds, home appliances, and temperature-controlled products, the railroads said.
In October, CN became a full partner in the UP-Norfolk Southern EMP container pool, which MacDonald says will benefit the Falcon Premium service by providing equipment that intermodal marketing companies can use.
UP in October booted Canadian Pacific out of the EMP program in advance of the CP-KCS merger. Last week CPKC landed a multi-year contract to handle Schneider National’s intermodal traffic between the U.S. and Mexico [see “CPKC to handle Schnider’s cross-border intermodal shipments …,” Trains News Wire, April 21, 2023]. Schneider’s Chicago-Mexico traffic currently moves via UP.
Asked how Falcon Premium would match up with CPKC’s single-line service, CN said it believes it will have the best intermodal service between Canada, Detroit, and Mexico. “It doesn’t matter what my competition does. We have a great product with this. And we think we’re actually going to have the fastest service,” MacDonald says.
The chief executives of all three railroads praised their deal.
“Falcon Premium service is a game changer for intermodal customers,” CN CEO Tracy Robinson says. “By leveraging each partner’s best services and routes, we are creating a transformational new product. 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.”
UP CEO Lance Fritz says the service will take advantage of the shortest route between Chicago and Mexico. “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,” he said in a statement.
Fernando Lopez, CEO of Ferromex owner Grupo Mexico, said, “The Falcon Premium service is tailor-made with the objective of providing new solutions to customers catering to the requirements of nearshoring demands.”
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