Genesee & Wyoming, Inc. (G&W) on Jan. 2 reported that Grupo Mexico Transportes (GMXT) will become its new joint-venture partner for the CG Railway, LLC, a U.S.-Mexico rail-ferry service. In August, the Surface Transportation Board (STB) approved GMXT’s indirect controlling ownership interest in CG Railway.
CG Railway has transported diversified commodities across the Gulf of Mexico since 2001, with long-term agreements to operate rail-ferry terminals at the ports of Mobile, Ala., and Coatzacoalcos, Veracruz (see map below). In 2017, G&W formed a joint venture with SEACOR Holdings, Inc., to own and operate CG Railway, which was established more than 20 years ago as a Class III and includes railroad equipment, ferries, and trackage rights over 0.583 miles of line of railroad in the Port of Mobile.
CG Railway has direct interchange in the U.S. with G&W subsidiary Alabama & Gulf Coast Railway, CN, CSX, Norfolk Southern and Alabama State Port Authority’s Terminal Railway (with connections to BNSF, Canadian Pacific Kansas City [CPKC], Union Pacific, and Mississippi Export Railroad, among others), and in Mexico with GMXT’s Ferrosur (with connections to GMXT’s Ferromex, FCCM/FIT, TFVM and CPKC de México).
GMXT in January announced its intention to purchase SEACOR’s stake in CG Railway, and will become G&W’s new joint-venture partner, “pending receipt of regulatory approvals,” according to G&W, a short line and regional railroad holding company that owns or leases 115 freight railroads world-wide.
On May 15, GMXT filed a petition under 49 U.S.C. 10502 for exemption from the prior approval requirements of 49 U.S.C. 11323-24 to allow it to acquire an indirect controlling ownership interest in CG Railway, according to the STB, which reported in the Aug. 13 edition of the Federal Register (download below) that it will grant the petition for exemption, subject to standard employee protective conditions.
“Specifically, GMXT (through GMXT Marine LLC, an indirect wholly owned subsidiary) will acquire all of SEACOR’s 50% ownership interest in the JV [joint venture], and 20% of GWI’s [G&W’s] 50% ownership interest, resulting in GMXT having an indirect 60% ownership interest in the JV and control of the JV and CGR,” the STB reported. “GMXT states that Seabulk Fleet Management LLC, an affiliate of SEACOR, will remain as ferry operator on a contract basis with CGR. In support of its petition, GMXT states that CGR will continue to operate in the same manner as it currently does … GMXT notes that concentrating ownership of CGR in GMXT, a frequent user of the rail ferry service, will ensure that revenue from the service is used for railroad purposes and provide GMXT with both greater incentive and ability to invest in the rail ferry and improve operations.”
According to the STB, the exemption will take effect Sept. 12; petitions to stay must be filed by Aug. 23, and petitions for reconsideration or petitions to reopen must be filed by Sept. 3, 2024.
G&W North America CEO Michael Miller in January commented: “This [move] further strengthens our partnership with GMXT, a leader in rail transportation services in Mexico with a strong presence in the southern U.S., including 13 ports between the two countries. Their network access and expertise, coupled with G&W’s ability to deliver safe and customer-centric first- and last-mile rail service, will enhance CG Railway’s overall service offering while extending the reach of CG Railway’s efficient and secure rail service into and out of Mexico.”
CG Railway offers a three-day port-to-port transit time and “an expedited customs clearance process,” according to G&W. It operates two new double-deck 590-foot roll-on/roll-off rail ferries, each with a capacity of 135 railcars and a top speed of 14 knots. CSSC Huangpu Wenchong Shipbuilding Company in China built both vessels and delivered them in 2021; CG Railway received the Mayan in September of 2021 and the Cherokee earlier the same year.
