The proposed $27 billion merger between two Class I railroads may contribute to unsafe railroading, she says.
As scrutiny of the railroad business will increase within the wake of a disastrous crash in Ohio final month, Sen. Elizabeth Warren (D-Massachusetts) is advocating in opposition to a proposed merger between two giant rail corporations that she says would solely compound issues inside the business.
In a letter despatched to the Floor Transportation Board (STB), an company charged with regulating the rail business and approving or denying mergers, Warren mentioned that permitting a proposed $27 billion merger would enhance anti-competitiveness in an business that’s already undergone excessive consolidation prior to now many years. This might even additional enhance transport prices whereas additionally doubtlessly contributing to unsafe circumstances for each frontline communities and rail staff, she mentioned.
The proposed merger is between Canadian Pacific and Kansas Metropolis Southern, two corporations categorised as Class I railroads, the top category of railroad corporations when it comes to income. The businesses are looking for to create the first unified rail network between Canada, the U.S. and Mexico that additionally runs from coast to coast of North America.
“Because the deregulation of the rail business by the Staggers Act in 1980, consolidation has quickly accelerated, with the variety of Class I railroads lowering from 33 in 1980 to only seven now. This proposed merger would scale back this quantity to only 6,” Warren wrote. “This merger would give the brand new firm further leverage over opponents, and has shippers apprehensive that they’ll be left with no various rail transport choices.”
The lawmaker went on to warn that greenlighting the merger may worsen rail service and lead to “vital” job losses, as presently exacerbated by the railroad business’s use of Precision Scheduled Railroading, a cost-cutting mannequin that has led to main job cuts — and safety issues, staff and rail unions say — throughout the business.
Although Warren is an everyday advocate in opposition to company consolidation, she will not be alone in sounding the alarm in regards to the Canadian Pacific and Kansas Metropolis Southern merger. The Division of Justice Antitrust Division not too long ago raised concerns in regards to the transfer, mentioning in comments to STB that latest provide chain issues have proven that competitors is essential inside the transportation business.
Members of the communities alongside the rail traces that might see greater site visitors on account of the merger have additionally raised considerations.
“When one among these trains derails whereas passing by this space of mega public occasions, 1000’s of individuals could possibly be killed,” Bill Gluba, the former mayor of Davenport, Iowa, said throughout a public listening to over the merger final yr, per the Quad-Metropolis Occasions. “It is a catastrophe of monumental proportions simply ready to occur and you’ve got the ability to forestall it.”
These considerations turned actual for the group of East Palestine final month when a Norfolk Southern prepare derailed, killing tens of thousands of animals and posing major short- and long-term health risks to residents.
Environmental and local weather advocates elsewhere alongside the route of the proposed rail community have added that a rise within the transportation of fossil gas merchandise would also increase risks to their communities. The merger would create a route connecting bitumen oil sands mines in Alberta, Canada, to coastal Texas, which might in flip enhance fossil gas refining alongside the Gulf coast in an space already house to the highest concentration of oil refineries within the U.S.
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