Rail deal puts Iowa on the right track

Access to rail transportation is essential to Iowa’s economic prosperity. Freight rail transports 40% of all long-distance freight volume for U.S. goods. Specifically, in Iowa, rail plays a critical role in moving corn, soybeans, biofuels, and manufactured goods to markets around the world. It also ensures the supply chains those manufacturers and producers need to operate are uninterrupted by bringing key components to Iowa companies and farmers.

Naturally, when there are changes with key transporters, Iowa’s agricultural and business leaders ask the question, “is this change good or bad for us?”

In the case of the Canadian National Railway Company’s (CN’s) acquisition of the Iowa Northern Railway (IANR), the answer for Iowa rail customers is that this development is clearly good.

Under the deal, Iowans will keep all the access we have today with Iowa Northern (including interline options with Union Pacific, Canadian Pacific, and CRANDIC railroads) and have new single-line options on CN that give Iowa freight customers more choices. Choice means competition. Competition means customers will get the best deal possible.

The Iowa Northern Railway is an Iowa success story. Its roots go back well over a century, serving customers with more than 215 route miles from Manly in northern Iowa down to Cedar Rapids and Oelwein. The Sabin family has owned and operated the IANR since 2002 and shepherded the company through challenging financial and operating times to be a successful, dependable, short-line railroad serving Iowa’s agricultural and manufacturing customers.

CN, a Class I railroad spanning the Atlantic to the Pacific in Canada and through the U.S. heartland to the Port of New Orleans, has operated in Iowa from the Missouri River to the Mississippi River for decades. CN has interchanged traffic with the Iowa Northern Railway for that entire time. A CN-IANR combination would allow more efficient and seamless operations between IANR’s customers and markets through the CN network.

CN acquiring the IANR is a win-win-win: customers will have more options to move their products to market, the infrastructure owned and maintained by IANR in Iowa will have access to more capital for ongoing maintenance and improvement, and IANR’s employees will gain long-term security and more opportunities for upward mobility.

CN sees the long-term opportunities that Iowa’s agricultural, biofuel and manufacturing production present. They could put their capital anywhere, but they are choosing Iowa because they know that what we produce will be in demand far into the future. This transaction is as much an endorsement of Iowa’s economic model as it is a recognition of the excellent condition and operational efficiency of the IANR.

As with any proposed railroad combination, the U.S. Surface Transportation Board will need to review the transaction. Let’s hope they see this deal puts Iowa’s farmers and manufacturers on the right track for the long term and issue a swift approval so customers and employees can take advantage of the benefits that will be available to them.

Mike Ralston is president of the Iowa Association of Business and Industry.