Businesses favor train merger, with some caveats

Note: Hear that train a-comin’ is a five-part series about an expected merger between Canadian Pacific and Kansas City Southern, and the impacts it would have on the communities of Washington County. This article is the fourth installment.

Washington County’s business leaders have a mixed bag of reactions to the proposed CP-KCS railway merger, most — but not all — of them positive.

For many, the jump from 4.2 to 18.4 average trains every day warrants attention, but not necessarily concern.

“If we get up to the level of trains that’s projected, that slight level of inconvenience goes up a little bit, but nothing that’s really going to affect our business,” said Mike Levy, partial owner of Mose Levy Co., a Washington steel company with two buildings, one on each side of the tracks. “I would hope it’s a benefit to other businesses in town that do use rail service, because we do not. And if it’s good for some of the other businesses in town, then I think it’s a benefit to Washington.”

Washington Economic Develop Group (WEDG) Executive Director Mary Audia said she expected to see those benefits, citing rail access as one of the most requested amenities for prospective businesses.

“There’s a lot of positives,” she said. “Maybe it will expand market and port options, there might be invigorated transportation competition, you know how we’re having such issues trying to find truck drivers … with a straight line railroad like this, your efficiencies are going to increase.”

Canadian Pacific Media Relations Manager Andy Cummings said the merger’s creation of the first single-line railroad from Canada to Mexico would increase market ranges for local businesses.

“If we have to work with another railroad, then we don’t control that shipment for part of its journey, it’s subject to delays, subject to additional costs,” he said. “So we think we can compete for business with this merger that in the past we wouldn’t have been competitive on. That does create broad public benefits for businesses, for hiring.”

Cummings said the merger — which would join CP and KCS lines where they meet in Kansas City — would especially change the game for Iowa’s corn producers, with increased access to high-demand markets in southern states and Mexico.

“Right now, it’s hard to justify investing in our infrastructure for a short haul like (Kansas City,) because to only haul it for 150 or 200 miles, we don’t get a big share of the revenue,” he said. “When we can control that shipment from origin to destination, we can justify making those investments.”

Post-merger, Cummings said Washington County’s access to those markets would improve drastically.

“We’ve said in the merger very directly that we think southern Iowa is one area where we can tap into the grain market, where in the past we largely have not handled a lot of grain in southern Iowa,” he said. “We haven’t had access to the destinations to use it. After the merger, we will have that access, and it may well result in our ability to serve farmers in a way that we just haven’t been able to in the past.”

While trains wouldn’t be stopping in Washington, Cummings said the benefits would still apply for any of the area’s businesses using rail access.

“Even if those trains don’t stop in Washington, we are capable of connecting them to trains that are going to take them to destinations,” he said. “So we have options for serving those local customers, and we’ll be able to deliver services to them in the future, should this merger be approved, that we’re not able to offer today.”

Main Street Washington Executive Director Sarah Grunewaldt said a working relationship with the railroad would be key to making the pros outweigh the cons.

“We have the opportunity as a community and as an organization to work together and be collaborative to solve some of these issues,“ Grunewaldt said. ”Yes, 14 trains running through downtown could be loud, it could be dusty, it could be disruptive … right now I’m not focusing on it as a problem or concerns we have, I’m focusing on how we can best address those things moving into the future.“

Many of those optimistic about the merger have a few caveats. Rakesh Patel owns Hawkeye Motel, which is close to the Highway train 92 overpass in Washington. He said he was in favor of the merger as long as the traffic didn’t run all night.

“To move goods and supply, they want to do it by train, that’s the purpose of that, so I’m not against it because as a business owner, we all have an issue about short supply,” Patel said. “If they’re all night long on the train, and for the residents they’re disturbing a lot, then I’m concerned, but otherwise I don’t have a concern at all.”

For those that already have rail access, like Iowa Renewable Energy (IRE) in Washington, the concern is more about logistical challenges than disruptions to service.

"You’re obviously tying up the main line track, and if the volume on that track multiplies by four or five, will there be opportunity for us to still be serviced on a regular basis?“ IRE Chief Operating and Financial Officer Ron Lutovsky said. ”Our current service is not always predictable, and this is going to throw some more unpredictability into it.“

While he acknowledged that the merger would save some transportation costs, Lutovsky said the benefits wouldn’t be that substantial locally.

“You’re able to get the cars from anywhere today, if you’re going to use the rail service, you’re likely already using it,” he said. “Through different switches you can go through, you can already get to the different markets, so I don’t see that the merger is going to bring anything to IRE that we’re currently not taking advantage of today.”

Others still are neutral about the change altogether.

Travis Korian, owns Iowa Brëd, a bar with a doorstep under 100 feet from a crossing in Washington. He said the trains didn’t bother his business.

“Frankly I think it’s just part of the atmosphere, part of the experience,” he said. “We don’t have an issue about the train … I think if you live in this town you’re aware, and everybody gets along just fine with it.”

The Washington Chamber of Commerce is also staying closer to neutral for the moment. Executive Director Michelle Redlinger said the group was focused on striking a balance.

“We really strive to provide a quality of life in Washington, and that involves your work life, your home life and everything in between,” she said. “I think there are some opportunities for us to really help our businesses and address some shipping bottlenecks that we are experiencing, but I don’t want that to happen at the detriment of the community.”

For the chamber, that means keeping a middle ground for now.

“Washington has fared really well over the years as a rural community and we’ve invested a lot into our downtown and our streetscape,” Redlinger said. “Not that those would be effected by increased rail traffic, but I just want to look at both sides of this merger, and so we are doing our very best to protect and advocate for both our businesses and our community members.”

For now, the group is focused on keeping the community in the loop, a task made difficult by the slow flow of information.

“I see us having a valuable role in that area,” she said. “As of right now, we still have so many questions that if we opened commentary up to the community, we don’t have the answers, and I don’t know if we will or when we will.”

Comments: Kalen.McCain@southeastiowaunion.com