North Texas

Canadian Pacific Kansas City to launch Wylie Automotive Facility in June following merger with KCS

Dallas, Texas – In January 2021, Kansas City Southern and NorthPoint Development unveiled plans to create a large-scale Wylie Logistics Park in Wylie, Texas, next to the railroad’s David L. Starling Wylie Intermodal Terminal. This park in the Dallas area was set to include 2.4 million square feet dedicated to warehouses and distribution, a modern intermodal terminal, and additional transportation facilities.

However, these plans did not come to fruition. Soon after their initial announcement, Canadian Pacific began a merger process with KCS, culminating in April 2023 with the formation of Canadian Pacific Kansas City. This new entity took ownership of the Wylie Intermodal Terminal, which has been operational since 2015 and was later expanded in 2018. The terminal boasts approximately 20,000 feet of track capacity, can handle over 340,000 container lifts annually, and includes 1,800 parking spaces and 300 spots for container stacking.

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Currently, CPKC is gearing up to pursue a different development project at this site. They plan to inaugurate the first stage of the Wylie Automotive Facility on a 30-acre site close to the intermodal terminal in June. Plans for further expansion of the automotive compound are already in place. CPKC’s leadership has frequently discussed the Wylie Intermodal Terminal at various financial and analyst meetings in recent months. They revealed that the upcoming automotive facility, which will accommodate many of the top-selling cars in Texas, is almost fully booked.

Company executives are optimistic that this new automotive facility will significantly boost their car-related business, which has recently seen impressive growth. In the first quarter alone, automotive revenue soared by 112% to CA$265 million, and volume surged by 94% to 55,700 units compared to the same period last year. CPKC now connects with 25 car manufacturing plants, reaching about 200 million consumers across Canada, Mexico, and the U.S. Midwest, and covers approximately 90% of the car assembly locations in Mexico.

The Dallas-Fort Worth area remains a crucial expansion zone for CPKC. Utilizing land formerly owned by KCS in Wylie, they are now poised to introduce new services to the market, according to Nadeem Velani, Executive Vice President and Chief Financial Officer.

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“We announced the [Meridian and Bigbee Railroad] deal with CSX, where we can look to bring Southeast U.S. traffic and take trucks off the road, and auto parts are going to be a big part of that and moving it into … Wylie,” he said as reported by Progressive Rail Roading. “So, certainly utilizing excess land and bringing that as an opportunity to grow traffic is our No. 1 priority.”

EVP and Chief Marketing Officer John Brooks explained that the auto compound is a strategic move by CPKC to introduce a new supply-chain model specifically designed for original equipment manufacturers.

“[This will] give them the service, reliability and capacity certainty like they’ve never seen before,” he said.

President and CEO Keith Creel highlighted that the Wylie Automotive Facility could significantly extend the transport distance for vehicles from manufacturing sites to their distribution destinations. For instance, vehicles currently transported from factories in Ontario to the Chicago area could potentially be redirected through CPKC to reach the Dallas market instead.

“It’s going to create empty supply to go down to Mexico and lengths of haul that today perhaps stop at Laredo or Robstown or are going to Minneapolis/St. Paul or to Canada,” said Creel.

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Creel also pointed out the vast potential in redirecting the flow of finished vehicles that currently travel along Interstate 20 and other major highways from the Southeast to Dallas, which are predominantly transported by truck. He sees these routes as valuable opportunities for CPKC to capitalize on.

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