CN notes support for Iowa Northern acquisition, urges regulators to reject CPKC request for haulage rights

WASHINGTON — Canadian National has agreed to some of the conditions sought by a grain shipper group and the U.S. Department of Agriculture as part of its proposed $230 million acquisition of Iowa Northern Railway.

CN says it will allow IANR customers to arbitrate gateway disputes, a condition that the National Grain and Feed Association and the USDA had sought. CN also committed to providing a post-transaction report on implementation of local service plans and integration of the railways’ customer service functions.

In a regulatory filing today, CN told the Surface Transportation Board that it was gratified by the support the proposed acquisition has received.

“Thirty support statements have been submitted, including many from customers who see the benefits of adding single-line service to the transportation options for customers on the Iowa Northern network,” CN said. “No individual shipper opposes the Transaction or requests any condition. Rail employees also support the Transaction, recognizing CN’s commitment to grow employment and traffic and to offer positions to the entire Iowa Northern workforce. And local communities and government officials have recognized that the Transaction is a good deal for Iowa.”

CN took rival Canadian Pacific Kansas City to task for contending that the acquisition would result in substantial competitive harm to shippers that CN and IANR serve in the area. As a remedy, CPKC has sought “discount” haulage rights over IANR.

CN says the supposed competitive threat “apparently escaped the notice of the Iowa Northern customers and communities who are supporting this Transaction.”

CN adds: “The proposed Transaction would cause no competitive harm and creates no basis for granting CPKC such an unprecedented regulatory windfall. CPKC’s arguments to the contrary are built on an expert analysis that is so flawed as to border on fakery.”

CPKC should have to compete by offering competitive prices and service, CN says, noting that CPKC has never developed substantial interline business with IANR.

CN says its proposed acquisition of the 218-mile Iowa Northern will boost rail competition, divert freight off the highway, and give Iowa shippers broader access to single-line service.