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Nilsestuen: Proposed Rail Merger Could Affect State Ag Businesses
Wisconsin Ag Connection - 02/04/2008

Wisconsin's agriculture secretary says the state must keep an eye on a proposed rail merger in the Chicago area, which he fears may erode already declining freight rail service in the state. Last week, Rod Nilsestuen said the farm industry and renewable fuel sector are already in need of more and better rail service.

The Canadian National Railway Company, the largest rail network in Canada, announced plans last year to acquire the Elgin, Joliet and Eastern Railway to improve the fluidity of their rail operations in the Chicago region. EJ&E, a Class II railroad, operates on the outskirts of the Chicago metropolitan area. The acquisition is subject to regulatory review by the U.S. Surface Transportation Board.

"The concentration of ownership in a few large railroads and a greater focus on improving the speed and efficiency of overhead traffic results in reduced service to the small, remote shipper," according to comments submitted to the STB by DATCP in January. "The increase of traffic on the CN mainline through Wisconsin will make it increasingly difficult for it to accept trainloads of traffic from regional carriers serving Wisconsin."

According to the Wisconsin Department of Transportation, the decrease in service has occurred at the same time that the portion of Wisconsin's economy depending on transportation service has grown more than 12 percent--from $187 billion to $212 billion.

Nilsestuen advocates for more and better service of Wisconsin businesses by the nation's railroad system. DATCP is the state agency responsible for promoting Wisconsin agriculture.

Comments sent to the STB last month and in 2007 cite numerous instances of declining service, rate hikes, and poor or no communications with smaller rail customers. The state's burgeoning biofuel industry relies heavily on rail and has the potential to be affected by limited rail service, according to DATCP comments.

The STB's review process includes an examination of competitive, transportation and economic implications; and potential environmental effects through an Environmental Impact Statement. A deadline has not been set for a decision since the EIS could take up to a year to complete.


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