<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=0SmUiC_16d3499d00" alt="https://img.particlenews.com/image.php?url=0SmUiC_16d3499d00" width="1280" height="720" ><figcaption>BNSF’s Kalispell Local pulls through a log yard in Columbia Falls, Mont., on Dec. 2, 2024. For 15 years, this branch to Kalispell was operated by Watco, but with the opening of a new rail park, BNSF decided to return to the line. Photo by Justin Franz.</figcaption></figure>Since 2020, Class I railroads have acquired more than 3,000 miles of trackage from short line and regional carrier—some of which they previously owned. On March 31, 2020, Montana’s Kalispell Branch resembled many of the more-than 600 short line and regional railroads across the United States: a scrappy, customer-focused operation using second-hand locomotives to move a handful of cars each day. But the next morning, on April 1, the Mission Mountain Railroad’s old MP15 locomotive was parked, and a pair of orange and black BNSF locomotives was making the 13-mile run to Kalispell.The news that BNSF had taken control of a branch line in Montana—a stretch of track that it had previously operated 15 years earlier—didn’t make many headlines in the industry press. However, it marked the beginning of a wave of short line acquisitions by major railroads; since 2020, Class I railroads have taken over more than 3,000 miles of track, nearly half of which was previously owned by the same railroad. Five years later, it raises the question: What did they gain from these deals, and are more on the horizon?<h2>Coming Back in Big Sky Country</h2><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=3aRQ5C_16d3499d00" alt="https://img.particlenews.com/image.php?url=3aRQ5C_16d3499d00" width="1280" height="720" ><figcaption>Montana Rail Link’s twice-daily Gas Local passes through Arlee, Mont., on July 22, 2018. Montana Rail Link operated the former Northern Pacific across Montana from 1987 until 2024. Photo by Justin Franz.</figcaption></figure>For decades, BNSF and its predecessors depended on the wood products industry to keep two branches in northwest Montana profitable—one to Kalispell and another to Eureka. As the regional economy changed, so too did the math for keeping those two routes. In late 2004, it spun off the 16-mile Kalispell Branch and the 23-mile Eureka Branch to Watco, which subsequently formed the Mission Mountain Railroad. While the Eureka Branch was sold outright, the Kalispell Branch was leased to Watco.Over the following decade, the fortunes of the short line generally mirrored the ups and downs of the timber industry. However, when the Kalispell Branch lease was up for renewal, BNSF chose not to extend it. That’s because in late 2019, a new rail-served industrial park opened on the south end of the branch, and suddenly, the math changed for the BNSF. The Glacier Rail Park was part of a multifaceted project that involved removing the last few miles of the branch that ran through downtown Kalispell and relocating the customers to a 44-acre park that offered ample room for expansion. The former right-of-way through town was converted into a pedestrian trail, and surrounding properties were redeveloped. Additionally, Kalispell and the nearby Flathead Valley had become one of Montana’s fastest-growing communities.“We saw a lot of growth opportunities in the Flathead Valley,” said Luke Johnson, General Manager of BNSF’s Montana Division, in an interview with Railway Age. “And having so many customers in one place at the rail park made it a lot easier for us to serve our customers.”<figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=2m2EhZ_16d3499d00" alt="https://img.particlenews.com/image.php?url=2m2EhZ_16d3499d00" width="1280" height="720" ><figcaption>Two BNSF locomotives lead the twice-daily Gas Local out of Missoula, Mont., on May 31, 2025. Predecessor Montana Rail Link stablished the Gas Local between Missoula and Thompson Falls to move fuel for ConocoPhillips. Photo by Justin Franz.</figcaption></figure>The Kalispell Branch wouldn’t be the last stretch of track BNSF took back in Big Sky Country. Two years later, BNSF announced it was reacquiring more than 900 miles of line in the southern part of the state, which had been operated by Montana Rail Link under a lease since 1987. When Burlington Northern was created in 1970, it had two main lines across Montana: the former Great Northern in the northern part of the state and the Northern Pacific through the southern part. While there was enough traffic to keep both routes busy, the southern line was more challenging to operate with helper districts on Bozeman and Mullan Passes, and it also had higher labor costs.Some say BN later regretted letting go of the southern main line, especially as traffic continued to increase. Although MRL and BN (later BNSF) maintained a close partnership, officials in Fort Worth recognized it made more sense for the route to be under their direct control again. In 2022, BNSF purchased the remaining 60-year lease of MRL from industrialist Dennis Washington. On Jan. 1, 2024, Montana Rail Link became BNSF’s “MRL Subdivision.” Over the nearly two years since, Johnson and others at BNSF have focused on integrating the MRL operation into their own. “Montana Rail Link ran a really good operation, and so in some ways it has been easy to bring it into the fold,” Johnson said.While BNSF and MRL often coordinated before the takeover, having both railroads under one umbrella has created new efficiencies, Johnson said. For example, the railroad around Billings and Laurel has long been a choke point, with four routes converging on the area managed by two different operators. But now, even minor tasks like fueling locomotives on through trains can be better coordinated, Johnson added.Having two main lines across Montana has also aided BNSF in coordinating operations on a larger scale. While Johnson said the railroad has not implemented directional running between the two routes, they have managed to increase train lengths on both lines, with heavier eastbound trains using the former Northern Pacific/MRL and westbound trains traveling via the former Great Northern. This routing helps trains avoid the state’s steepest grades.Perhaps the biggest change along the former MRL in recent years has been installation and ongoing activation of Positive Train Control. MRL voluntarily started installing the crash-prevention technology a few years ago. Johnson said BNSF has been completing that installation this year. The technology was activated on the First (Jones Jct. to Laurel) and Third Subdivisions (Helena to Missoula) in October, and it will be activated on the Second (Laurel to Helena) and Fourth Subs (Missoula to Sandpoint) before the year’s end.<figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=35VBQN_16d3499d00" alt="https://img.particlenews.com/image.php?url=35VBQN_16d3499d00" width="1280" height="720" ><figcaption>Montana Rail Link and BNSF locomotives mingle in the yard at Helena, Mont., on Oct. 19, 2024. MRL leased BNSF’s main line across southern Montana from 1987 until 2024. One of the challenges of the route is the mountain grades near Livingston and Helena. Photo by Justin Franz.</figcaption></figure>While bringing MRL back into the fold has allowed BNSF to find more efficiencies within its operation, the biggest perk has been its people, Johnson said. While merging two different cultures comes with challenges, he said the MRL team has gone above and beyond to make the transition smooth. “The biggest surprise for me has been how the employees have been eager and willing to be a part of the BNSF team,” he said. “Change is hard, but everyone has persevered, and I think BNSF as a whole is better with MRL’s people.”<h2>CPKC Returns to the East</h2><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=03KpMq_16d3499d00" alt="https://img.particlenews.com/image.php?url=03KpMq_16d3499d00" width="1280" height="720" ><figcaption>A trio of Central Maine &amp; Quebec locomotives leads a freight train near Onawa, Me., on Nov. 21, 2017. The short line was created after Fortress Investment Group purchased the Montreal, Maine &amp; Atlantic in 2014. CM&amp;Q was sold to CPKC in 2020. Photo by Justin Franz</figcaption></figure>In 1995 and 1996, Canadian Pacific sold large portions of its network east of Montreal. Changing economics and traffic patterns reduced traffic on its routes, most notably its International of Maine Division, sometimes called the “Short Line” because it cut across the middle of Maine to reach the Maritimes. Over the next 25 years, CP’s lines in eastern Quebec, New Brunswick, Me. and Vermont were operated by a collection of short lines. The most infamous was the Montreal, Maine &amp; Atlantic, best known as the railroad at the center of the Lac-Mégantic oil train disaster in 2013. MM&amp;A went bankrupt soon after, and its track was sold to Fortress Investment Group, which created the Central Maine &amp; Quebec. Fortress invested heavily in the railroad and helped rebuild traffic. However, the short line didn’t quite fit into its portfolio, so in 2019, the investment group put it up for sale. Re-enter Canadian Pacific.CP (now CPKC) purchased Central Maine &amp; Quebec for $130 million, and the sale closed Dec. 30, 2019, 25 years almost to the day CP left Maine and the Maritimes. In some ways, it was an abrupt turnaround for the company. But as analyst Tony Hatch notes, “CP was a much different company 30 years ago.” In the 1990s, CP began spinning off its non-railroad entities, and as part of that, it also aimed to streamline its rail system. However, by 2019, when CM&amp;Q went up for sale, CP saw opportunities in the East again, particularly at the Port of Saint John. Since 2017, the port and its operator, DP World, have invested hundreds of millions of dollars in modernizing the facility, including deepening berths in the harbor to accommodate larger container ships and adding more cranes.<figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=4XcxTo_16d3499d00" alt="https://img.particlenews.com/image.php?url=4XcxTo_16d3499d00" width="1280" height="720" ><figcaption>Canadian Pacific and Central Maine &amp; Quebec locomotives are seen leading a train east of Jackman, Me., on Jan. 13, 2021. CP reacquired much of its main line across Maine in 2020, giving it closer access to the growing Port of Saint John, New Brunswick. Photo by Justin Franz.</figcaption></figure>Since acquiring most of its former eastern main line in 2020 (the section between Brownville Jct., Me., and Saint John is owned and operated by J.D. Irving’s NMB Railways, which collaborates with CPKC to serve the port), the Class I has invested more than $90 million to upgrade infrastructure, according to spokesperson Terry Cunha. It has also helped CPKC regain an advantage over its rival, CN which maintains an all-Canadian main line to the Maritimes that goes up and over the state of Maine.“This purchase has provided CPKC and its customers with direct competitive access to Atlantic Canada and U.S. Northeast markets, offering a route that is shorter and less congested than competitors—approximately 200 miles shorter to key destinations—with direct connections to North American markets,” Cunha said in a statement to Railway Age.Having a link to CPKC’s 20,000-mile trinational network has been a game changer for the Port of Saint John, said CEO Craig Bell Estabrooks. In 2021, the year after CPKC purchased CM&amp;Q and launched direct intermodal service to Saint John, the port handled the equivalent of 86,000 20-foot containers (TEUs). This year, Estabrooks expects more than 250,000 containers, largely thanks to CPKC. He aims to surpass 400,000 containers annually by 2030.One factor that has helped distinguish Saint John from other Maritime ports is its rail connectivity, said Estabrooks. Besides CPKC, the port has a direct link with CN and an indirect one with CSX through NBM Railways, thanks to that Class I’s 2022 acquisition of Pan Am Railways. (CSX has yet to establish intermodal service to Saint John, but Estabrooks says the port and the railroad stay in contact.) But among the three, CPKC has been the game changer.“CPKC has really put their shoulder into this,” Estabrooks said. “They have changed our world dramatically.”<h2>A Trend or Just Good Deals?</h2>CM&amp;Q and MRL aren’t the only short lines and regional railroads to have been absorbed by Class I railroads in recent years. In 2022, CSX bought Pan Am Railways; in 2024, CPKC and CSX acquired Meridian &amp; Bigbee in Alabama (although, in that case, the short line still provides local service); and in 2025, CN finalized the purchase of Iowa Northern. The reasons vary for these transactions. In the instance of BNSF’s takeover of MRL, analyst Larry Gross opined that the deal corrected what was a “short-sighted and ill-advised spin-off” in the first place. In other instances, a short line becomes an attractive acquisition target because it has worked hard to increase traffic. That becomes an even easier transaction if the route is being leased. “Ironically, the better the short line performs, the less likely it is to be renewed,” Gross said.Analyst Tony Hatch said many of the recent deals have been a matter of timing and opportunity. In the case of CPKC’s return to the Maritimes, not only was the company itself different, but so were the growth opportunities in Eastern Canada with the port expansion. For CN’s recent acquisition of Iowa Northern, it was a simple matter of the railroad being up for sale and fitting nicely into the Class I’s network. “Everyone is looking for growth, and if you can extend the length of your haul and the railroad happens to be for sale, then that is going to be an attractive deal,” Hatch said.Whether there are more transactions like the ones seen during the past five years will depend entirely on what short lines and regionals come up for sale, Hatch said. Although with the industry focused on the proposed Union Pacific-Norfolk Southern merger, it’s possible the map will be temporarily frozen, he added.While the transactions in Maine, Montana and Iowa have grabbed the headlines, Hatch said he believes smaller deals, like one in Oregon, are more likely in the years ahead. In 2025, Union Pacific made a deal with Genesee &amp; Wyoming for subsidiary Central Oregon &amp; Pacific to handle UP’s local switching and customers in and around Eugene. Hatch said that having short lines handle first- and last-mile service often makes more sense because those companies tend to be nimbler than a Class I and can offer service whenever a customer needs it.“I think in the future we’ll see greater cooperation [between short lines and Class I’s],” Hatch said.</div></body>

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Since 2020, Class I railroads have acquired more than 3,000 miles of trackage from short line and regional carrier—some of which they previously owned. On March 31, 2020, Montana’s Kalispell Branch resembled many of the more-than 600 short line and regional railroads across the United States: a scrappy, customer-focused operation using second-hand locomotives to move a handful of cars each day. But the next morning, on April 1, the Mission Mountain Railroad’s old MP15 locomotive was parked, and a pair of orange and black BNSF locomotives was making the 13-mile run to Kalispell.

From Class I to Short Line and Back

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Since 2020, Class I railroads have acquired more than 3,000 miles of trackage from short line and regional carrier—some of which they previously owned. On 

From Class I to Short Line and Back

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