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40 itself, would be unlikely to deter legislators and officials who the EJ&E from other lines in the Chicago area. Shippers sup- have decided that reduced heavy-truck traffic on local roads ported the acquisition, because they also perceive improvement will be of benefit. To the extent that businesses in their state in moving through the congested Chicago rail nexus.47 The re- or area experience higher trucking costs, it probably will not sult will be a major increase in traffic through the towns on the register on the political scale, unless the cost is high enough EJ&E line with corresponding decreases in traffic through other to cause firms to consider relocation. One trucking executive communities. observed that his firm had to discontinue service to a cus- Typical mitigation measures requested in cases of this tomer in an eastern state when local restrictions made service nature include construction of a new line bypassing the too costly for them. He believed, however, that the customer towns or elimination of grade crossings by construction was able to find another carrier that was willing to bear the of overpasses or underpasses. Sound barriers or earthen costs of service in that area. berms are also sought to mitigate noise impacts. At least Relocation of terminals and distribution centers might nine towns and one county filed comments opposing the have enough of an economic impact to catch the attention of acquisition. Barrington, IL, argued that no mitigation was officials, and this would likely be an unexpected impact and possible so that the proposed acquisition should be re- one not directly intended. But the research team cannot infer jected.48 The STB ultimately approved the transaction with that relevant officials would have acted any differently in such mitigating conditions.49 The required conditions included a case, even had they known that they might lose some jobs two grade-separation projects with CN required to bear and raise costs for affected businesses. 67.0 percent of the cost of one and 78.5 percent of the other. Various safety and noise measures were also included as con- ditions. Beyond the STB-imposed mitigations, CN entered Local Policies to Oppose into voluntary arrangements with a number of towns. CN a Railroad Acquisition has estimated the cost of the voluntary agreements at $60 Policy Description million.50 (CN has not made a public estimate of the cost of the required mitigations.) For reasons of quality of life and safety, local governments may take actions to block a proposed railroad acquisition so as to prevent increases in railroad traffic in their communi- Unexpected Impacts ties. Increased rail traffic may cause more noise and roadway From the perspective of local elected officials, negative fi- congestion. Specific concerns include blockage of street traf- nancial effects on the CN are not relevant and neither is the fic at grade crossings, safety, and train noise and vibration. efficiency enhancement that would have been lost if the STB The benefits of rail traffic increases often include freight-system had turned down the transaction. The focus of these officials efficiency gains. is the impact on life in their towns and not on larger questions As a general principle, local governments have no author- about the efficiency of the freight system. It is likely that they ity to constrain levels of rail traffic on an existing line or other- are not aware of negative impacts on the system, but it is also wise interfere with rail operations. However, local govern- the case that knowledge of such impacts would be unlikely to ments can attempt to influence railroad traffic in the case of change their positions. merger and acquisition proceedings before the Surface Trans- The STB is, of course, keenly aware of impacts on the portation Board (STB). Local governments typically do this freight system; it is the Board's task to analyze and under- by formally adopting a resolution opposing the acquisition, stand those impacts. The Board's decision was fully informed then submitting comments to the STB. Some may go further on the efficiency issues. Greater knowledge of the effect on the by hiring consultants to conduct analysis that bolsters their freight system would not have changed the positions of the case or filing a lawsuit against the STB or railroad. parties in this case. The STB had sufficient knowledge, and the positions of the local officials would not have been Policy Impacts affected if they had had the same knowledge. In the case of rail mergers or acquisitions, local (or state) 47 governments can ask the STB to either reject an acquisition or National Industrial Traffic League, comment, January 28, 2008, STB Finance Docket 35087. impose conditions, which imposes costs on railroads. A good 48 Village of Barrington, comment, February 15, 2008, STB Finance Docket example is Canadian National's (CN's) recently approved ac- 35087. quisition of the Elgin, Joliet, and Eastern (EJ&E), a short line 49 STB, Decision No. 16, Canadian National Railway Company and Grand Trunk Corporation--Control--EJ&E West Company, December 24, 2008, STB Fi- that runs just west of Chicago through many suburban neigh- nance Docket 35087. borhoods with a southern terminus in Indiana. CN believes it 50 CN press release, "CN reaches seventh Illinois voluntary mitigation agreement will obtain significant efficiency gains by rerouting traffic over for EJ&E transaction," December 23, 2008.