Like many transportation professionals, I have been watching with interest the developments around the proposed sale of the Kansas City Southern railroad, to Canadian Pacific or to Canadian National. The future of the sale and first major railroad merger in more than 20 years is currently in the hands of regulators at the federal Surface Transportation Board.
The result of their deliberations could have a significant impact on rail transportation as well as roadway traffic in metropolitan Chicago. While I recognize that a well-functioning national rail freight system is vital to the economy of our nation and our region, the negative impacts of rail traffic are disproportionately felt in metropolitan Chicago, where the six largest North American railroads converge.
Potential negative impacts from a CN purchase of the KCS include delays at highway crossings due to rail traffic, conflicts with Metra and Amtrak passenger service, safety issues that arise from increased numbers and lengths of freight trains, and environmental and air quality concerns. All of that potential fallout must be fully evaluated prior to the Surface Transportation Board approving the use of a voting trust as part of the proposed merger.
Using a voting trust in this situation removes incentive for CN and the KCS to remain competitors during the formal regulatory review period. Significant issues must first be analyzed and resolved, particularly as they relate to the Chicago region. While CN claims that there will be no additional rail traffic generated in Chicago due to the purchase of the KCS, they seem to ignore the fact that traffic coming to the Chicago region going elsewhere in the Midwest, to central Canada and to the west will have to use the Elgin, Joliet and Eastern Railway, or EJ & E, which runs through many of our region’s fastest growing suburban communities in an arc from Waukegan to Park Forest and on to Gary.
In 2008, when I was executive director of the Chicago Metropolitan Agency for Planning, I had significant concerns regarding increases in rail traffic that would occur due to CN’s purchase of the EJ & E. I continue to have many of those concerns today as more, longer trains tie up traffic, block access to emergency vehicles, conflict with Metra and Amtrak trains and disrupt our communities. This merger could also mean new freight train delays for drivers in other communities Downstate, along routes that will see new train traffic, such as in Springfield.
While CN has argued that increased traffic would go east from Matteson — much of their automotive cargo would go that direction — from their own maps they show significant increases in other types of freight moving north and west that would have to use the EJ & E. These market shifts could result in an increase of 30% or more in the number of trains moving on the EJ & E through communities that have already seen significant increases in train volumes over the past decade. CN’s own op-ed pieces say that their strategy is to bypass downtown Chicago, and to utilize the EJ & E. While it is admirable that CN wants to avoid the heavy downtown traffic, the Chicago region is more than the Loop and to ignore the impacts on suburban communities seems to be a bit myopic.
While I am concerned about the regional impacts, as former secretary of the Illinois Department of Transportation, I am also concerned about the competitive issues that can be caused through the CN purchase. In Downstate Illinois and across the nation, our companies rely on an efficient, economical transportation system to move goods from farm or factory or distribution center to markets. The potential reduction in options for shippers ultimately results in higher transportation costs that lead to higher prices for our consumers. In parts of the southern U.S. and the Midwest, CN and the KCS both serve markets like Springfield that would see competition reduced and transportation options limited.
Until the impacts on metropolitan Chicago and national competitive issues are analyzed, the Surface Transportation Board should reject CN’s request for use of a voting trust as part of its proposed merger with the KCS. There are simply too many impacts that could need significant mitigation for this purchase to proceed on a fast track. I urge our communities and elected officials to examine what this sale could mean for them, the Chicago region and the state of Illinois to make sure that those concerns are addressed.
Randy Blankenhorn is a former secretary of the Illinois Department of Transportation and former executive director of the Chicago Metropolitan Agency for Planning.
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