Union Pacific (UP) and Norfolk Southern (NS) will begin a new domestic intermodal rail service in October linking Louisville, Kentucky with ports on the US West and Gulf coasts, reports New York's Journal of Commerce.

The service will interchange containers between UP and NS at the newly expanded Kansas City Intermodal Terminal (KCIT), which opened in August. The goal is to eliminate long drayage hauls from cities like Chicago and Cincinnati to Louisville.

The joint service comes amid UP's proposed US$85 billion acquisition of NS, which would create the first transcontinental US railroad with 50,000 miles of track and access to 100 ports.

KCIT is expected to serve as a key relief valve for Chicago's congested intermodal network and could support future transcontinental services to central Pennsylvania and New York-New Jersey.

KCIT will connect Louisville with Los Angeles, Lathrop, Seattle, Portland, Salt Lake City and Houston. NS is expanding truck parking and tracking capacity at its Louisville terminal, which has focused more on international than domestic intermodal freight.

Ed Elkins, chief commercial officer at NS, said the service offers a reliable and sustainable alternative to trucking, helping customers reach untapped markets.

According to the US Surface Transportation Board, Louisville's largest intermodal freight origins are the Port of Virginia with 35,000 loads by over 20 per cent.