Photo: Norfolk Southern

Photo: Norfolk Southern

Norfolk Southern Corp. is purchasing a subsidiary of Canadian Pacific Railway, Delaware & Hudson Railway Co., to increase its reach in the Northeast.

NS will acquire nearly 283 miles of D&H rail line between Sunbury, Pennsylvania, and Schenectady, New York for $217 million. The deal is subject to approval by the U.S. Surface Transportation Board.

“Acquiring this portion of the D&H provides for a more efficient rail transportation system by consolidating freight operations with a single carrier,” said Norfolk Southern CEO Wick Moorman. “Aligning the D&H track with Norfolk Southern’s 22-state network allows us to connect businesses in central Pennsylvania, upstate New York and New England with domestic and international markets while enhancing the region’s competitive rail and surface transportation market.”

The lines to be acquired connect with NS’ network at Sunbury, Pennsylvania, and Binghamton, New York, and would give NS single-line routes from Chicago and the southeastern United States to Albany, New York, and NS’ recently built Mechanicville New York, intermodal terminal, according to a Norfolk Southern release.

NS said it would also gain an enhanced connection to its joint venture subsidiary Pan Am Southern railway, which services New England markets. D&H would retain local access to serve customers in Schenectady and would maintain its access to shippers in Buffalo.

NS has submitted an application for the transaction to the U.S. Surface Transportation Board. The rail companies are proposing a schedule that would lead to approval during the second quarter of 2015.