North America - Canadian Pacific Railway's (CP) proposed tie-up with Norfolk Southern Corp. (NS) would ease congestion in the key Chicago-area rail hub by rerouting trains across a more efficient combined rail network, CP President Keith Creel said Friday.
 
Mr. Creel's comments to The Wall Street Journal came as his company proposes to merge with NS to create a railroad stretching 34,000 miles across Canada and the U.S. with annual revenue of US$14.8 billion.
 
This week, NS rebuffed CP's second takeover proposal, valued at about US$30 billion.
 
CP unveiled its initial proposal last month.
 
The two railroads are among the six major U.S. and Canadian railroads that converge in Chicago to exchange railcars and reassemble them onto new trains headed to the same destination.
 
Belt Railway Company's 265 miles of tracks around the Chicago area switch about one million railcars a year, making Chicago the busiest interchange in North America.
 
Congestion has often plagued the area during periods of high volume and inclement weather, causing delays.
 
In the winter of 2013-2014, extreme weather conditions and a boom in the transport of crude by rail created gridlock in Chicago that backed up trains as far away as western Canada and Ohio.
 
Mr. Creel said a tie-up would allow CP to redirect as much as 20 percent of its daily railcar volume through Chicago to NS's interchanges and rail terminals.
 
The railroads currently interchange at five cities:  Detroit, Buffalo N.Y., Kansas City Mo., Chicago, and Albany N.Y.
 
If the companies combined, some eastbound trains could travel on CP's tracks in southern Ontario and connect to NS's lines in Buffalo, avoiding Chicago.
 
While the route is longer, avoiding heavy traffic could actually cut travel time, he noted.
 
CP spokesman Martin Cej said the railroad handled a daily average of 2,492 railcars in Chicago this year.
 
Of those, the rail carrier interchanged an average of 1,915 railcars every day with other railroads, including 588 railcars with NS.
 
Mr. Creel also said CP could win freight business from shippers willing to avoid logjams in Chicago even by taking a longer route.
 
"A larger network gives you more options," Mr. Creel said.
 
Last week, NS Chief Executive James Squires said on a conference call that CP's Chicago traffic volumes were the smallest of any major rail carrier at about 5 percent of the total.
 
"Any rerouting of this traffic would have a minuscule impact on overall congestion," Mr. Squires said.
 
A NS spokesman declined to comment further Friday.
 
Mr. Creel said he had no update on CP's plan to merge with NS.
 
"We'll respond in due course," he said.
 
David George-Cosh.