How might the major railroad merger affect Chicago-area residents? – NBC Chicago

The first major rail merger in more than two decades is set to go ahead after federal regulators approved Canadian Pacific’s $31 billion acquisition of Kansas City Southern, but some Chicago-area residents fear this decision has worrying repercussions.

The two railroads are the smallest in the country, but Wednesday’s approval by the U.S. Surface Transportation Board comes after a long and arduous review, as their coupling will create the only railroad connecting Canada, Mexico and United States.

A number of Chicago suburbs are not in favor of the merger, saying it would dramatically increase traffic and put communities along the line at risk.

The “Coalition to Stop CPKC,” made up of mayors from the suburbs of Bartlett, Bensenville, Elgin, Itasca, Hanover Park, Roselle, Wood Dale, Schaumburg, as well as parts of DuPage County, says the merger could also jeopardize the railway safety, create traffic jams and increase the risk of train derailments.

“On behalf of the coalition, we are extremely disappointed and shocked by today’s decision by the Surface Transportation Board,” Itasca Mayor Jeff Pruyn said.

And while the railway’s proposal says the merger would increase the number of freight trains by an average of eight a day, the coalition has raised concerns that the number could in fact be higher.

Metra is also not in favor of the merger, officials say.

Regulators said in a report earlier this year that the only major impact of the deal would be more noise in places where rail traffic is expected to increase significantly. The Surface Transportation Board essentially dismissed concerns that the deal would create problems in towns along the tracks by blocking railroad crossings for long periods of time or clogging the already busy rail network around Chicago and creating problems for commuter trains.

The biggest traffic increases are expected between Chicago and Laredo, Texas, with some of the rail lines across Iowa expected to see more than 14 additional trains per day and the tracks between Kansas City, Missouri, and Beaumont, Texas likely to see about 12 more trains per day.

Officials in small towns along the railroad like Camanche, Iowa, on the upper reaches of the Mississippi, told regulators that first responders could be delayed getting to a fire or urgent health issue because of long trains can block all level crossings in town at once.

“I believe this merger would compromise the critical effectiveness of our paramedics, paramedics and firefighters, as well as the health and livelihoods of those who need a rapid response,” the Camanche Fire Chief wrote, Dave Schutte, in a letter to regulators.

Several towns in suburban Chicago also opposed the merger due to concerns about increased traffic, which could cause some commuters to abandon the Metra rail system and drive instead.

But the Surface Transportation Board has determined that the projected increase in rail traffic on the new rail network will only add a few seconds to the average delay when crossing block time is averaged over all vehicles that cross a level crossing every day, including all those that are never stopped.

Others have expressed concern that the merger will lead to safety issues, particularly following the derailment of a hazardous materials train at the Ohio-Pennsylvania border that led to the rejection and burning toxic vinyl chloride from five tank cars.

“We are going to go from at least three freight trains a day to at least 11 freight trains and up to 18 freight trains a day,” Congressman Raja Krishnamoorthi said during a press conference with the Coalition to Stop CPKC on Wednesday. “According to the Environmental Impact Statement, an additional 11,000 carloads of hazardous materials will pass through suburban Chicago, 50% of which are flammable. Imagine then: 5,000 or more carloads of flammable hazardous waste will be added to the traffic passing through the suburbs on the Milwaukee District West line. And yet, the STP said there was no increased risk associated with its merger. ”

What you need to know about the merger

The first major rail merger since the 1990s was approved in Washington DC on Wednesday after federal regulators announced their decision on Canadian Pacific’s $31 billion acquisition of the Kansas City Southern Railroad.

The Transportation Council said the new direct service “will facilitate the flow of grain from the Midwest to the Gulf Coast and Mexico, the movement of intermodal goods between Dallas and Chicago, and the trade in auto parts, finished vehicles and other containerized mixed goods. between the United States and Mexico.

The board said the transaction, which will have little to no redundant lanes or overlapping routes, is also expected to create more than 800 new union jobs in the United States.

The US Surface Transportation Board has been reviewing the deal since it was agreed in 2021.

That deal nearly derailed in 2021 when Canadian National offered $33.6 billion and Kansas City Southern accepted that offer. But that competing deal fell apart after the Surface Transportation Board rejected part of the plan to acquire Canadian National.

In 2001, regulators made it harder to approve mergers after the disastrous 1996 combination between the Union Pacific and Southern Pacific deal blocked shipments for an extended period and the 1999 decision to split Conrail between Norfolk Southern and CSX created delays in the East. The Surface Transportation Board said any future merger would only be allowed if it enhanced competition and served the public interest.

The rail industry is under pressure to improve safety following the massive Norfolk Southern derailment in Ohio last month, which prompted evacuations and created ongoing health concerns. Major freight railroads have announced several steps they plan to take, but that may not be enough to satisfy regulators and members of Congress who are pushing for sweeping reforms.

Calgary-based Canadian Pacific has long had its U.S. headquarters in Minneapolis, but plans to move to Kansas City, Mo., if this deal is approved.

The proposed Canadian Pacific Railway in Kansas City would still be the smallest of the major freight railways with about 20,000 miles of track, but it would be the only one connecting Canada, the United States and Mexico.

The major railroads are trying to find ways to work through grudges over last year’s bitter contract negotiations that included Kansas City Southern. But Canadian Pacific, which is negotiating separately with its unions, said it has already reached deals with some of the biggest rail unions that will offer even bigger raises than most railroaders and address some of workers’ concerns about the quality of life of demanding schedules. . These agreements should come into force now that the agreement has been approved.

Canadian Pacific’s proposed purchase of Kansas City Southern is unlikely to trigger another round of rail mergers, as regulators have set the bar high for such deals. The rest of the industry is expected to remain stable with two major railroads in the western United States – Union Pacific and BNSF – two in the eastern United States – CSX and Norfolk Southern – and Canadian National running trains across Canada and parts of the United States. states.

The only recent deal involving a major railroad is Berkshire Hathaway’s 2010 purchase of Warren Buffett from BNSF, but that deal has come under less scrutiny because it was not a merger. of two rivals. A few years prior to this agreement with Kansas City Southern, Canadian Pacific had unsuccessfully attempted to purchase both Norfolk Southern and CSX.

NBC Chicago

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