A recent decision by rail regulators in the United States is good news for Canadian grain shippers, especially operators of the new container port at Prince Rupert.
An environmental impact statement filed with the U.S. Surface Transportation Board appears to clear the way for Canadian National Railway’s acquisition of the Elgin, Joliet and Eastern (EJ&E) Railway.
The transportation board must now evaluate the takeover.
“This is certainly a significant step forward,” said CN spokesperson Mark Hallman.
“We hope now that the record is complete the board can make an expeditious decision.”
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CN’s agreement with U.S. Steel Corp., which owns the EJ&E, requires that the transaction take place by Dec. 31.
The $300 million acquisition will allow CN to bypass congested tracks in the Chicago area when moving trains from Canada into the U.S. Midwest.
“Sometimes it can take longer to move a train from the north side of Chicago to the south side of Chicago than to move a train from Winnipeg to Chicago,” said Hallman.
He said by speeding up rail traffic moving through the Chicago area, the railway’s entire system will benefit, especially trains moving between Western Canada and the U.S. Midwest. That includes container traffic from Prince Rupert.
“This transaction isn’t about Prince Rupert, but it will certainly benefit container movement to the U.S. and the backhaul as well,” said Hallman.
CN estimates it will save 30 hours off the time it takes for trains to get to Memphis, a key distribution point for containerized goods, making Prince Rupert more competitive with the heavily used port of Los Angeles-Long Beach.
The environmental impact analysis, prepared by a division of the Surface Transportation Board, concludes that communities along the five CN lines leading into and out of Chicago will gain environmental benefits.
However, it also concludes communities along the EJ&E will be negatively affected by more rail traffic.
CN has already reached agreements with some communities along the line dealing with issues like quiet zones, safety, communication, emergency preparedness and grade crossings, and is negotiating with other towns and villages.
The railway has promised to spend $60 million on mitigation, in addition to the $100 million it will spend on improving track infrastructure.
