Martin Oberman. (photo from STB video)

The U.S. Surface Transportation Board today  approved the merger of Canadian Pacific and Kansas City Southern railroads — a move that eventually will triple train traffic through parts of eastern and southern Iowa.

Board chair Martin Oberman talked about the decision in an online news conference. “One of the underlying factors that we found in this merger is that putting these two small railroads together, will actually provide a stronger competitive landscape in the rail industry visa vie these much larger railroads,” he says.

Oberman says there has been much discussion about the consolidation of the industry — but the board found this to be a unique circumstance.  “One of the key aspects of this merger, which is different from all past mergers that I’m aware of, is that it is end to end. The the roots of CP and KCS do not overlap, they do not serve the same origins and destinations. So there will be no loss of a parallel competitive route by putting these two railroads together,” Oberman says.

He says there are many gateways in the rail system that overlap and give shippers an option and this agreement will protect that.
“This decision imposes a requirement that all of those gateways remain open on the same open terms that exists today without the merger,” Oberman says. “And we imposed a very stringent supervision of that requirements so that it is complied with.”

Oberman says the benefits to the economy from the merger will be substantial. “Single line service between Canada through the United States and Mexico will enhance trade enhanced productivity, enhance shipper opportunities to expand their own businesses. That was one of the key factors that led us to find that this merger is in the public interest,” he says. Oberman also says safety was a factor as he says despite recent events — rail transportation has far fewer accident issues when shipping dangerous materials than shipping on the highway system.

There were hearings in Iowa on the merger and that included people opposed to the increased traffic, noise and plans to shut off some rail crossings. Several cities agreed to settlements with Canadian Pacific to finance improvements around the tracks. Davenport approved a ten million dollar settlement, while Muscatine and Bettendorf each approved three million dollar settlements with the Canadian Pacific.

Radio Iowa