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Canadian National “is continuing to evaluate all options available to us,” said Jonathan Doorley, a spokesman for Canadian National.

Kansas City Southern said on Sunday that it had deemed an offer from Canadian Pacific superior to a bid from Canadian National, in the latest turn in a monthslong battle to become the first railroad to connect North America.

Canadian Pacific first put forward a roughly $29 billion bid for Kansas City Southern in March, before being topped by a $33.7 billion offer from its rival, Canadian National, in April. But the Canadian National deal hit a key regulatory challenge this month, sending Kansas City back to talks with Canadian Pacific. The talks proved fruitful.

The crown jewel in the deal is Mexico, as the railroads look to capitalize on trade flows across North America on the heels of the United States-Mexico-Canada Agreement signed into law last year.

Closing a deal could take time. It must be approved by shareholders of both companies, as well as approved by Mexican authorities and the Surface Transportation Board, the U.S. regulatory board that oversees rail deals.

Kansas City Southern has notified Canadian National of its intention to terminate that deal, both companies said on Sunday. Canadian National has five days to make a better offer. If Kansas City opts for Canadian Pacific, Canadian National will receive $700 million in breakup fees, according to the terms of their deal.

Read more here.

Related: “Feds reject initial CN plan for merger with Kansas City railroad that’s drawn ire from some suburbs,” “Suburbs wary of proposed railway merger that could mean more freight trains,” and “Could railroad merger lead to more freight trains in the suburbs?

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CNIt wasn’t a knockout punch, but federal regulators’ rejection of an important component of the Canadian National Railway’s bid to buy the Kansas City Southern Railway might signal good news for suburbs opposing the merger.

The U.S. Surface Transportation Board on Monday nixed CN’s request to create a “voting trust” that would hold KCS’s stock until the merger is decided on by STB members.

“The board finds that the proposed use of a voting trust … would not be consistent with the public interest” and “would give rise to potential public interest harms relating to both competition and divestiture,” members wrote in a ruling announced Tuesday.

A number of municipalities from Bartlett to Barrington urged the STB to deny the plan, fearing a merger would add to freight train traffic and delays that surged when the board in 2008 approved CN’s purchase of the smaller EJ & E Railroad, which runs through multiple north, west, and south suburbs.

Also weighing in was the Canadian Pacific Railway, initially embraced by Kansas City Southern as a merger partner this spring, only to be dumped when CN moved in.

“The STB decision clearly shows that the CN-KCS merger proposal is illusory and not achievable,” Canadian Pacific President Keith Creel said in a statement. To Kansas City Southern’s board, he wrote, “CP has always maintained that the CN-KCS combination and the proposed CN voting trust is not in the public interest,” Creel said. “Hundreds of rail shippers, community leaders, elected officials and other stakeholders have voiced those same concerns and today the STB agreed.”

Read more here.

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CN

Canadian National’s rail crossing on Route 14 just east of Route 59 in Barrington. The village is closely watching as federal regulators consider a proposed merger between CN and Kansas City Southern Railway could bring more freight train traffic through town. (Paul Valade | Staff Photographer)

The brawl between railroad giants Canadian National and Canadian Pacific to acquire Kansas City Southern Railway tilted in CN’s direction Friday when officials announced a merger agreement with KCS. But many forces are at play that defy a predictable outcome in the continental dispute touching nerves in the suburbs.

Kansas City Southern’s board of directors hailed what they called a “superior” Canadian National proposal, alarming towns located along CN tracks that they may become collateral damage.

The merger, which still requires U.S. Surface Transportation Board approval, “will meaningfully connect the continent with enhancing competition, offering more choice for customers, and driving environmental stewardship and shareholder value,” CN President JJ Ruest said in a statement.

Unfazed, Canadian Pacific told STB regulators they’re not giving up and the rejection “reflects the extreme price CN has offered.”

In 2008, the STB approved a controversial merger between CN and the smaller Elgin, Joliet and Eastern Railway, which runs through the north, west, and south suburbs, multiplying trains on those tracks when Canadian National took possession. Now there are fears of a repeat with KCS, a major freight carrier that extends into Mexico.

However, “CN faces an uphill battle,” DePaul University and railroad expert Professor Joseph Schwieterman said. “A year ago, the acquisition might have sailed though Washington, but circumstances are different now, under the Biden Administration.”

Read more here.

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CN 2008

The Canadian National Railway’s proposed takeover of the EJ & E Railroad prompted protests by community members in Barrington in 2008.

A replay of a 2008 battle to stop the Canadian National Railway from acquiring another railroad is emerging in the suburbs with similar concerns about spiraling freight train traffic.

There’s a twist this time, however, as both CN and its rival the Canadian Pacific Railroad are vying to merge with the Kansas City Southern Railway, a major freight carrier whose reach extends to Mexico.

Any merger, regardless of whether it’s CN or CP, would require approval from federal regulators, but the prospect of Canadian National joining with the Kansas railroad is already raising hackles in suburbs from Barrington to Bartlett.

A number of communities are asking the U.S. Surface Transportation Board to carefully scrutinize CN’s proposal before taking any action.

There is potential that “CN’s freight trains will further burden the Chicago area with increased road network congestion by adding a significant increase in freight rail volumes,” Bartlett Mayor Kevin Wallace wrote the STB on behalf of the Metropolitan Mayors Caucus Executive Board, of which he is chairman.

In 2008, CN received STB approval to purchase the smaller EJ & E, which passed through the northwest and southwest suburbs.

Attorney Richard Streeter, who is representing Barrington, characterized the new proposal as a “traffic congestion nightmare” in a letter to the STB.

“EJ & E communities have now been left coping with longer and slower trains, which would only increase yet again with the proposed merger,” Streeter wrote.

Read more here.

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Without consensus on safety, liquefied natural gas needs another look

The Daily Herald and leaders of several of our suburbs were among those arguing years ago that crude oil shipments by train should be restricted to newer, stronger tank cars that are more likely to withstand a derailment or crash without rupturing, exploding and burning.

That viewpoint largely prevailed, with new requirements unveiled in 2015 that mitigate the risk.

But now the federal government is upping the ante, exposing towns along freight rail lines to potential new danger with the judgment that now that tank cars are safer, they can be used to move material that is more volatile.

The U.S. Department of Transportation over the summer authorized railroads to haul liquefied natural gas around the country, even in the face of the National Transportation Safety Board questioning whether doing so would be safe.

Natural gas is a chameleon, turning liquid at -260 degrees and taking up 1/600th of the space it requires as a gas, making it cheaper to transport. If the gas gets overheated and the tank ruptures, such as following a derailment or crash, it can explode violently into a fireball that will keep burning until the fuel is gone.

Read on here.

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A new federal rule allows liquefied natural gas to be transported by train across the U.S., sparking concerns from Barrington and other suburbs.

A new player, liquefied natural gas, has joined the list of hazardous materials cruising through Illinois by train — a move the federal government says is safe but raises fears of out-of-control fires and explosions for some suburbs.

This summer, the U.S. Department of Transportation authorized railroads to haul liquefied natural gas (LNG) across the country.

Prior to approval, more than 460 entities commented — mostly critically — on the plan, including Barrington, which is crisscrossed by the Union Pacific and Canadian National railroads.

The potential for a catastrophe “is quite acute,” village officials stated. “An uncontrolled LNG release involving fire stemming from a derailment scenario must burn itself out as there is no practical way to extinguish it.”

Federal officials are confident that upgraded DOT-113 tank cars with double shells and thick carbon steel can safely contain any spills.

New requirements, such as remote monitoring of tank car pressure, will “provide for the safe transportation of LNG by rail to more parts of the country where this energy source is needed,” U.S. Transportation Secretary Elaine Chao stated.

Read on here.

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We will take the Federal Railroad Administration at its word that it wants to hear from us regarding how long we get stuck, repeatedly, at rail crossings in the suburbs.

And so, it is our civic duty to tell them.

We’re not being facetious. Being continuously hung up at crossings is a quality-of-life issue. At best, it can be inconvenient. At its absolute worst, it can be deadly, if police, fire and paramedics are prevented from getting to a scene — or a hospital — quickly.

The FRA has recently started a website asking people to report lengthy delays they experience at rail crossings, where a milelong freight is crawling past at the speed of … snails. 

Read the complete Daily Herald editorial here.

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Residents in Hoffman Estates and Elgin are enlisting elected officials in their fight to block plans for a second railroad track beginning here at Shoe Factory Road in Hoffman Estates and running south to Spaulding Road in Elgin.

Hoffman Estates and Elgin residents fighting an expansion of Canadian National Railway tracks near their homes are enlisting federal, state and local leaders in their efforts to raise concerns with the U.S. Army Corps of Engineers, which could issue a permit for the project later this month.

CN, through its subsidiary Wisconsin Central Limited, wants to build a second line of railroad track spanning 4.27 miles from Shoe Factory Road in Hoffman Estates to Spaulding Road in Elgin. Together with existing track, the project would create a 6.1-mile stretch of double track.

According to the proposal, the double track would allow the railroad to boost “fluidity” and reduce train idling. CN said in its permit application that it expects to run an additional nine trains per day in 2020.

Both the Hoffman Estates and Hanover Township boards have passed resolutions objecting to CN’s plans.

Read more here.

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A game-changing underpass at Route 14 and the CN tracks is within Barrington’s grasp after regional officials awarded the village $48.5 million in federal funds Thursday.

Barrington leaders have been chipping away for years at the $73.5 million project separating busy Route 14 from the Canadian National Railway tracks that host multiple freight trains. The project will rebuild Route 14 so it runs under the CN tracks.

Federal grants have already supplied about $11 million, and Darch expects the remaining $14 million to be generated through federal, state, and some local contributions along with funding from CN.

Chicago Metropolitan Agency for Planning and a related group, the Metropolitan Planning Organization policy committee, approved the grant Thursday. About $10.6 million will be awarded to Barrington in 2020 and $37.9 million will come in 2023.

Read the full Daily Herald article here.

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Representatives from the Canadian National Railroad met last week with a roomful of Northwest suburban homeowners upset over the company’s plan to build a 4.27-mile track near their properties.

The track would run adjacent to the existing CN mainline track from Spaulding Road in Elgin to Shoe Factory Road in Hoffman Estates, part of a sprawling transcontinental network that has the Chicago area at its center.

Residents aired a litany of grievances about the proposal over the course of the two-hour meeting Thursday at Timber Trails Elementary School in Hoffman Estates. Among them, noise pollution from trains which frequently idle for hours on the track behind their homes.

The public meeting was a requirement of the permit approval process for the U.S. Army Corps of Engineers. CN must now address all public comments received by the Army Corps, as well as comments from their office.

The full Daily Herald story can be found here.

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