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(erielack) CP/NS agreement will change Binghamton to Buffalo ops

Got this in email today. Looks to mostly affect the Buffalo and Binghamton
yards and maybe reduce CP power on the Tier.

For the Buffalo part of it, the NSR "marshalling" yard would be their facility
on the site of the Bison Yard I believe. I have no idea what will happen to
the ex-Erie SK Yard area.

Henry

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Date: Wed, 30 Jun 2004 13:39:55 -0400
From: Bob Rohauer
Subject: CP & NS Move to Improve Performance of Northeastern Rail  Network

CPR and NSR Move to Improve Performance of Northeastern Rail Network
Wednesday June 30, 8:42 am ET
Press Release Source: Norfolk Southern Railway

CALGARY, Alberta, June 30 /PRNewswire-FirstCall/ -- Canadian Pacific
Railway (CPR) and Norfolk Southern Railway (NSR) today signed a
memorandum of understanding for an exchange of trackage rights, freight
haulage and yard services that will increase operational efficiency and
enhance rail service to customers.
CPR (NYSE: CP; Toronto) announced in June 2003 it was restructuring its
northeastern U.S. operations and was seeking proposals for ways to
increase freight volumes, reduce operating costs and improve earnings.
CPR's northeastern U.S. network is operated as the Delaware and Hudson
Railway.

"This agreement with NSR opens up new opportunity to move our
northeastern U.S. franchise into a position of profitability," Rob
Ritchie, President and Chief Executive Officer of CPR, said. "We expect
the changes will generate higher traffic volumes and revenues, greater
productivity and lower operating costs."

David R. Goode, Norfolk Southern Chairman, President and Chief
Executive Officer, said, "This is an excellent example of railroads
cooperating to better serve our customers. We will be able to jointly
provide transportation solutions that will improve efficiency and
quality of service for both carriers in the northeast U.S."

Under the agreement, CPR and NSR will consolidate freight marshalling
at yards in Buffalo and Binghamton, N.Y.:

* CPR will cease yard operations in Buffalo, shifting all freight
marshalling to the NSR yard there.

* Similarly, NSR will shift its yard operations in Binghamton to CPR's
East Binghamton yard.

There are three major components to the new trackage rights and freight
haulage arrangements between CPR and NSR:

* CPR will be able to move NSR freight traffic between Rouses Point and
Saratoga Springs, N.Y., under a haulage arrangement.  NSR will
operate
its own trains over CPR's line between Saratoga Springs and
Binghamton, N.Y., under a trackage rights arrangement.  The
arrangements will generate higher revenue for CPR and provide NSR
with
a substantially shorter route to Quebec and the Maritime provinces.

* CPR's freight traffic between Binghamton and Buffalo, N.Y., will move
in NSR trains under a haulage arrangement, replacing a trackage
rights
agreement under which CPR operated its own trains between the two
cities.  The arrangement will reduce CPR's operating costs and
generate additional revenue for NSR.

* CPR will operate over a new NSR route using existing rail lines
between Detroit and Chicago under a trackage rights agreement.  It
will be the shortest rail route between the two cities and will
provide CPR with a faster, lower-cost lane.

"CPR's challenge remains to take this part of our network to a level of
profitability that will make it self-sustaining," Mr. Ritchie said. "We
are prepared to examine additional measures that, in concert with our
NSR agreement, will further optimize our assets and drive up
profitability."

New trackage rights arrangements and the discontinuance of trackage
rights require approval of the U.S. Surface Transportation Board.

Mr. Ritchie will hold a conference call with analysts and reporters
today at 3:30 p.m. Eastern time to discuss details of the agreement
with NSR. The telephone numbers for the call are 1-800-814-4857 or
416-640-1907. Callers should dial in 10 minutes prior to the call. A
telephone replay of the call will be available through July 7 at
1-877-289-8525 or 416-640-1917, pass code 21056014 followed by the
pound key. The call will also be webcast live on CPR's website,
http://www.cpr.ca. To access the webcast, click on Investor Information
and choose Investor Presentations. The webcast will be archived through
July 30.

Canadian Pacific Railway is a transcontinental carrier operating in
Canada and the U.S. Its 14,000-mile rail network serves the principal
centres of Canada, from Montreal to Vancouver, and the U.S. Northeast
and Midwest regions. CPR feeds directly into America's heartland from
the East and West coasts. Alliances with other carriers extend its
market reach throughout the U.S. and into Mexico. Canadian Pacific
Logistics Solutions provides logistics and supply chain expertise
worldwide. For more information, visit CPR's website at
http://www.cpr.ca.

Norfolk Southern Railway operates 21,500 routes miles in 22 states, the
District of Columbia and Ontario, serving every major container port in
the eastern United States and providing superior connections to western
rail carriers. NSR operates the most extensive intermodal network in
the East and is the nation's largest rail carrier of automotive parts
and finished vehicles. For more information, visit NSR's website at
http://www.nscorp.com.

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