WASHINGTON — Canadian National has agreed to some of the conditions sought by a grain shipper group and the U.S. Department of Agriculture as part of its proposed $230 million acquisition of Iowa Northern Railway.
CN says it will allow IANR customers to arbitrate gateway disputes, a condition that the National Grain and Feed Association and the USDA had sought. CN also committed to providing a post-transaction report on implementation of local service plans and integration of the railways’ customer service functions.
In a regulatory filing today, CN told the Surface Transportation Board that it was gratified by the support the proposed acquisition has received.
“Thirty support statements have been submitted, including many from customers who see the benefits of adding single-line service to the transportation options for customers on the Iowa Northern network,” CN said. “No individual shipper opposes the Transaction or requests any condition. Rail employees also support the Transaction, recognizing CN’s commitment to grow employment and traffic and to offer positions to the entire Iowa Northern workforce. And local communities and government officials have recognized that the Transaction is a good deal for Iowa.”
CN took rival Canadian Pacific Kansas City to task for contending that the acquisition would result in substantial competitive harm to shippers that CN and IANR serve in the area. As a remedy, CPKC has sought “discount” haulage rights over IANR.
CN says the supposed competitive threat “apparently escaped the notice of the Iowa Northern customers and communities who are supporting this Transaction.”
CN adds: “The proposed Transaction would cause no competitive harm and creates no basis for granting CPKC such an unprecedented regulatory windfall. CPKC’s arguments to the contrary are built on an expert analysis that is so flawed as to border on fakery.”
CPKC should have to compete by offering competitive prices and service, CN says, noting that CPKC has never developed substantial interline business with IANR.
CN says its proposed acquisition of the 218-mile Iowa Northern will boost rail competition, divert freight off the highway, and give Iowa shippers broader access to single-line service.
“CN says its proposed acquisition of the 218-mile Iowa Northern will boost rail competition” …..except with CPKC.
The whole thing looks weird to me. IANR is a rounding error compared to CN. IANR traffic would add very little revenue compared to a multi-billion sized CN. Short lines usually (but not always) sell to other short lines. I don’t have inside knowledge, but this seems to be a retirement plan for longtime IANR employees.
Not saying they don’t deserve it, they worked hard to make it what it is, but CN couldn’t care less if they stopped servicing JimBob’s Pig Fertilizer when they update their numbers (10x the overhead) against what IANR’s overhead was.
Guess John you didn’t read that CN is going to let IANR run themselves (with certain limits I suppose). CPkc wants something it had no use for before only because CN took the initiative. That is something that CPkc could have attempted but could not afford. So they beg for “haulage rights” which costs very little in hopes of getting the same deal Union Pacific got from KCS that prohibits grain shipments from specific areas of the midwest from forcing their way directly through UP owned gateways in the gulf, (Houston) another attempt to get something for nothing by Mr. Creel and his associates (not of kcS parentage…)
Oh, and by the way, those arguments that you cited made by CN in justifying this are the same ones used by every other railroad that took control (merged) of another railroad so that is nothing new and is exactly what CP said when they bought out (merged) KCS.
Someone is actually just looking to line their pockets with CN’s money…namely the current owners of the IANR. That would be the only reason you would sell a successful growing regional/shortline to one of the existing Class 1 carriers, as opposed to the several groups of companies that own multiple Regional/Shortlines such as WATCO, G&W, RJC, etc., etc.,…
once CN takes over, service will will disappear. just look at what happened on the WC
so all you shippers on the Iowa northern may as well start looking for trucks.
How does merging 2 parallel railroads “boost rail competition”? The STB should reject or impose significant conditions.
If the sale of Iowa Northern to CN is successful, I look for Canadian National to abandon it’s current line between Manchester Ia and Cedar Rapids Ia, since it would be redundant. Also, the current Iowa Northern line between Cedar Falls and Manly Iowa would be at risk ,since CN currently has a line paralleling it between Cedar Falls and Glenville MN. As far as offering jobs to current employees, the Iowa Northern employees better be willing to move. CN has a large network.
IANR lots of online business, particularly adjacent the Butler Yard area near Shell Rock. I think it is safe.
IANR has trackage rights on CPKC west of Nora Springs to reach the Forest City branch. CN can’t access this branch from the existing CN line.