Rail merger may mean more trains blocking traffic
Due to interest rate hikes and historic inflation, consumers are feeling worse about the U.S. economy than a year ago, according to a respected University of Michigan survey.
The supply chain remains damaged and will continue to struggle. An impending merger between Canadian Pacific and Kansas City Southern has been discussed as a possible solution to the supply chain challenges, but this will not be the case.
In fact, the merger will only bring more harm to Texas communities.
For Houstonians, the merger would likely mean even more long trains going through town, blocking intersections.
As a former congressman, after hearing from neighbors and former constituents, I feel that these concerns need far more attention.
Research has found that severe delays and congestion follow mergers, and that systemwide problems occur both during the transition and long-term. An increase in trains through Houston – which this merger will create – will lead to disruptive construction and re-route issues. An example of this is the 1996 merger of Union Pacific and Southern Pacific. More disruptions occurred, and there were more episodic service disturbances than premerger.
But would the merger help the supply chain? To put it simply, no. In due time, following a merger, rail routes are often canceled, and the availability of shipping options decreases.
In their defense, Canadian Pacific and Kansas City Southern say that this merger will be different than those of the past because their systems have minimal overlap, so integrating them will be simpler. This claim doesn’t hold water because these types of “end-to-end” mergers still allow railroads a variety of options to limit competition – denying service to competitors, canceling reciprocal switching agreements, or simply closing critical gateways.
A decrease in Class I railroads in the United States comes at the benefit of railroad companies, and rail companies alone.
If successfully merged, Canadian Pacific would have the power to discontinue less profitable routes. Fewer routes –— with the ability to increase prices due to limited competition — mean a larger bottom line for the corporations, but there are few, if any, benefits to the public, the economy or the supply chain.
A decrease in competition means that farmers pay more to ship their produce, and consumers pay more at the grocery store.
Worse yet, this consolidation will allow Canada to own the only route connecting all North American nations, stretching from Canada to Mexico.
This is concerning for U.S. shippers, which
could potentially lose the option to transfer southbound cargo to other rail lines. It’s worrisome to port workers, since U.S. ports could lose out to Canadian and Mexican ports.
The merging rail companies can produce reassuring statements and silence rail-side communities with their checkbook.
But why should we trust them?
Canadian Pacific has failed to be honest about many things, but specifically about the delays in Texas.
CEO Keith Creel used a video to show how operations could be improved on the double-track route through Houston, assuring the Surface Transportation Board that the train took 74 minutes to make its way from the east end of UP’s Englewood Yard to West Junction.
In reality, this is an incomplete picture, leading regulators to believe there is minimal traffic on the KCS trackage rights routes through Houston.
That’s untrue.
The Surface Transportation Board has also failed Texans regarding environmental justice, and has gone against its Agency Equity Plan.
The Surface Transportation Board did not adequately acknowledge equity within their draft Environmental Impact Statement for the Canadian Pacific-Kansas City Southern merger, citing only noise as a negative impact.
Worse yet, they have largely failed to properly engage with the most deeply impacted community, who are Native American. If they were working on equity and acknowledging environmental justice, why was the Surface Transportation Board’s first choice for its only hearing in Texas a community that is 97 percent white?
The board’s selection of Vidor instead of Harris County, despite the latter’s repeated requests for a hearing, is not aligned with its stated “clear role in advancing environmental justice for minority and low-income communities.”
This merger will not benefit communities, businesses or our economy.
The Surface Transportation Board does not seem to be thinking of our community’s best interests, so it is time local leaders and federal regulators speak up to ensure that all possible disturbances are fully thought through.
The CP-KCS merger will not save our supply chain, and it certainly will not benefit railside communities.
Chris Bell represented Texas’ 25th Congressional District from 2003-2005 and served on the Houston City Council from 19972001.