Canadian National Railway has signed an agreement aimed at increasing the amount of container traffic that enters North America via the Gulf of Mexico and the Port of Mobile, Alabama.
The railway announced June 15 that it has signed a three-way memorandum of understanding with the Alabama State Port Authority and APM Terminals Inc.
The port authority owns public shipping terminals at the Port of Mobile, while APM operates a 95-acre, deep sea container terminal at the port.
The agreement commits the three parties to making continuous improvements to their operations with the ultimate goal of expanding the port’s reach and increasing container traffic volumes.
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The deal coincides with a major expansion project at the Panama Canal, which is projected to double the canal’s shipping capacity by next year.
CN officials said in an email that the deal with APM and the port authority “will facilitate ongoing discussions among the parties … highlighting opportunities to connect the port with CN and its affiliated railroads to drive new import, export and domestic volumes between the U.S. Midwest and various Canadian points.”
The deal will eventually result in a joint service agreement that will “detail the manner in which the parties will work together in serving the port.”
The Panama Canal expansion is a $5.25 billion project that began in 2007.
Work is now 90 percent complete.
The expansion includes construction of new, larger locks, improvements to the Pacific channel entrance and construction of wider, deeper canal channels.
Locks at the canal now allow the passage of ships that can carry up to 5,000, 20-foot equivalent units (TEUs) of container cargo.
The expansion will allow the passage of “new Panamax” vessels capable of carrying 13,000 TEUs.
In anticipation of the Panama Canal expansion, the Alabama State Port Authority is in the process of building a new $32 million rail terminal that will allow rapid transfer of containers between ocean vessels and rail cars.
The Alabama State Port Authority’s rail terminal will be located adjacent to the container handling facility owned by APM.
“We believe the (MOU) … will extend the geographic reach of the Port of Mobile so that we all can take advantage of potential new container rail traffic following completion of the Panama Canal expansion project in 2016,” said J.J. Ruest, CN’s executive vice-president and chief marketing officer.
“With increased canal capacity and the new rail facility at the Port of Mobile, CN sees a third coast opportunity for increased volumes of container traffic entering North America via the Gulf of Mexico.”
CN also announced this month that it is investing $20 million to improve its refrigerated cargo handling capacity.
The railway will acquire 200, 53-foot temperature-controlled containers as well as 32 electrical generators that will be used to move refrigerated containers to and from CN-served ports on CN intermodal trains.
The company said the acquisitions will help producers and distributors of chilled and frozen food expand their businesses in North America and overseas markets.
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