CPKC to open Dallas vehicle compound and move more volume to rail

The vehicle yard will form part of CPKC’s closed loop rail service for finished vehicles between Canada, the US and Mexico. Kansas City Southern opened a terminal in the Wiley Logistics Park in 2015, which was expanded in 2018, and became part of the merged company when CPKC was formed in 2023.

“This compound is part of our playbook that unlocks an entirely new supply chain model for the OEMs, giving them the service, reliability and capacity certainty like they’ve never seen before,” said John Brooks, executive vice-president and chief marketing officer of CPKC in the rail provider’s Q1 earnings call. “I’m proud to report that this new compound is largely sold out, and will handle many of the top selling vehicles within the Texas market.”

Keith Creel, president and CEO of the company, said the Wylie yard would provide a destination for vehicles shipping out of Ontario, Canada, rather than them shipping to Chicago as is current. 

“It’s going to create empty supply to go down to Mexico and lengths of haul that today perhaps stop at Laredo or Robstown are going to be going to Minneapolis/St. Paul, or going to Canada,” said Creel in the earnings call. “This thing is a multiple chapter story. We’re not going to get it built out overnight. It’s a two, three, four, five-year plan. That in and of itself that one business unit offers significant, I think, accretive incremental improvements to driving that length of haul.”

Creel also pointed out that there are “thousands of carloads” moving by road between US south-eastern markets on Highway I-20 parallel to the Meridian Speedway, a 510km span of railroad track between Shreveport, Louisiana and Meridian, Mississippi. “Those are ripe for opportunities – rail wins, the environment wins, competition wins; this is all a good story,” he said. 

In support of that goal of shifting more vehicles to rail, last year CPKC did a deal with CSX and Meridian and Bigbee Railroad (MNBR), a subsidiary of Genesee & Wyoming short line rail provider. As part of the deal, CPKC will acquire and operate the segment of the MNBR between Meridian and Myrtlewood, Alabama. Meanwhile, CSX operates the line previously leased by MNBR east of Myrtlewood. In doing so, CPKC and CSX are establishing a direct CPKC-CSX interchange at Myrtlewood and, in exchange, G&W acquires certain Canadian properties owned by CPKC (and other rights). MNBR will have rights to continue to provide local services to existing customers on former MNBR-owned lines and connect with other railroads without interchange restrictions.

Along with the Dallas/Wylie railyard, CPKC has identified further capacity projects in Mexico and on the second span of the International Bridge at Laredo. 

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