Rail regulator approves sale of CN track to U.S. short-line owner

The U.S. Surface Transportation Board has green-lit the sale of a 250-mile stretch of rail line between Sault Ste. Marie and Oba, Ont. to Kansas-based short-line operator Watco.

The approval was announced Tuesday as part of a larger approval of branch lines in Wisconsin and Michigan.

"CN and Watco will work together in the coming weeks to implement a seamless transition for customers on the lines," the two rail companies said in a joint news release.

If Mask-wa Oo-ta-ban – 'Bear Train' proposed by Missanabie Cree First Nation and Mask-wa Transportation Association Inc. – is to run between the Sault and Hearst, an agreement will be needed with Watco to run between Oba and Hearst on the CN tracks.

In a news story posted Monday, Railfan and Railroad Magazine reported that a shipping group that earlier opposed the sale to Watco had changed its mind and now supports the deal.

The following statement was issued Tuesday by Canadian National Railway Co.:

CN and Watco announce Surface Transportation Board Approval of the sale of rail lines in Wisconsin and Michigan

MONTREAL, Dec. 21, 2021 - CN (TSX: CNR) (NYSE: CNI) and Watco are pleased to announce that the United States Surface Transportation Board (STB) has approved the sale of non-core lines and assets on approximately 650 miles of branch lines of Wisconsin Central Ltd. in Wisconsin and Michigan.

This marks an important step toward the successful conclusion of the sale process that CN announced and launched in July of 2020, which also includes the sale of the Soo subdivision (approximately 250 miles of track) that runs from Sault Ste. Marie, Ontario to Oba, Ontario.

CN and Watco will work together in the coming weeks to implement a seamless transition for customers on the lines.

After closing, CN will continue to play a central role in Wisconsin and Michigan, as the transferred segments will remain connected to CN’s tri-coastal network, safely and reliably linking businesses to markets around the world.

CN is committed to building the railway of the future -- a railroad that creates value for its shareholders by truly serving the needs of its customers.

About CN

CN is a world-class transportation leader and trade-enabler.

Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year.

As the only railroad connecting Canada’s Eastern and Western coasts with the U.S. South through a 19,500-mile rail network, CN, and its affiliates have been contributing to community prosperity and sustainable trade since 1919.

CN is committed to programs supporting social responsibility and environmental stewardship.

About Watco

Watco is a leading service and logistics company providing transportation, mechanical repairs and maintenance, material handling and warehousing, and logistics solutions for customers throughout North America and Australia.

Watco is one of the largest short line railroad holding companies in the U.S. with more than 5,000 miles of track.

Through its 40-year history, Watco has grown to be a leader in the railroad industry through exceptional customer service, improved safety and a strong commitment to its public and private partners.

Watco-controlled railroads currently operate over 600 miles of track within the state of Wisconsin.