CN–UP Agreement Expands CN’s Access to Mexico via UP

The CN–UP agreement expands CN’s access to Mexico through new operating rights between Memphis and Eagle Pass, while CPKC retains North America’s only single-line, three-country rail network.

CN–UP Agreement Strengthens a Partnership-Based Alternative

Under the binding memorandum announced on July 22, 2026⁠, CN will receive operating rights over Union Pacific’s network between Memphis, Tennessee, and Eagle Pass, Texas. UP will gain expanded operating rights over CN’s Elgin, Joliet & Eastern corridor around Chicago. The companies plan to advance these arrangements independently of the proposed UP–NS merger.

The companies say the new rights will allow CN to compete more effectively for freight moving between Canada and Mexico in both directions. The agreement does not create a combined CN–UP network, but it gives customers another partnership-based routing option in a market where CPKC emphasizes the benefits of single-line service.

CN already serves the market through Falcon Premium⁠, an all-rail interline service developed with UP and Grupo México Transportes. The new rights expand that partnership-based model rather than create a single-line network.

This narrows the access gap in the Canada–Mexico market without eliminating CPKC’s structural distinction. CN’s routing will depend on operating rights over UP infrastructure, while CPKC remains one carrier with a network spanning Canada, the United States and Mexico.

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CPKC Retains Its Single-Line Network Distinction

CPKC describes its system of approximately 20,000 route miles⁠ as the first and only single-line transnational railway linking Canada, the United States and Mexico. The CN–UP agreement does not remove that distinction because operating over another railroad’s infrastructure differs from moving freight entirely across one carrier’s network.

For customers, however, the agreement makes the nature of that distinction more concrete. CPKC retains its unique network structure, while CN gains a stronger partnership-based alternative for Canada–Mexico shipments. The two operating models therefore remain different.

Merger-Related Concessions Remain Conditional

A separate settlement agreement⁠ covers merger-related concessions and remains contingent on Surface Transportation Board approval and completion of the proposed UP–NS transaction. CN will not oppose the merger and, if those conditions are met, would gain access to affected shipper facilities, Norfolk Southern’s interests in two terminal railroads, additional operating rights in the Midwest and use of UP’s Neff Yard in Kansas City.

CPKC’s rail-consolidation campaign remains focused on opposing the UP–NS transaction and argues that the combined railroad would control approximately 40% of U.S. freight rail traffic.

In August 2025, CPKC said it was not interested in immediate rail industry consolidation and would remain focused on its three-country network. That statement predates the latest CN–UP agreements, so it provides strategic context rather than a response to them.

Neither announcement disclosed a start date or financial terms for the new operating-rights arrangement.