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New railroad merger could impact rail safety nationwide

The railroad industry as a whole is facing intense scrutiny by the government and the public since the derailment in East Palestine, Ohio.
Posted at 12:14 PM, Mar 22, 2023

Canadian Pacific's Kansas City Southern merger would consolidate the rail industry even more.  

While the safety records of both rail companies were analyzed so the merger could move forward, the industry as a whole has been facing intense scrutiny by the government and the public since the derailment in east Palestine, Ohio.

Kansas City resident Bob Baker has lived near the tracks for 40 years. 

"Most of us [have] been on this block forever. We don't even notice the train going up and down the track," he said.

In light of a $31 billion deal by Canadian Pacific to acquire Kansas City Southern, more trains will soon pass by his home. 

The agreement marks the first major rail merger in more than two decades to be approved. 

Both carriers are considered among "class one" railroads in the U.S., meaning they have operating revenues of $490 million or more per year. 

But Baker says recent derailments, specifically the one in East Palestine, Ohio last month, remain a concern. 

Canadian Pacific trains sit at the main CP Rail train yard in Toronto, Canada

First major US railroad merger in 2 decades will go forward

Canadian Pacific's $31 billion acquisition of Kansas City Southern will create the only railroad linking Canada, Mexico and the U.S.


"Especially after the accident out in Ohio. Things go wrong," Baker said. 

From 2005 to 2021, the U.S. Department of Transportation reported an average of 1,475 train derailments a year, making them a somewhat common occurrence in the U.S. 

What's not common? The type of derailment that occurred in East Palestine, which resulted in the spilling of hazardous materials, a controlled chemical burn, and impacts to the air, soil, and water. 

It's also raising questions about health concerns for residents and first responders.

"To say I was scared the night of the derailment was an understatement," Sen. Bob Casey said.

In response, Senate Democrats introduced the "Railway Safety Act," which would, in part, require rail companies to create a disaster plan and inform emergency personnel of hazardous materials traveling through their community. 

That's something Canadian Pacific already offers

For 17 years in a row, Canadian Pacific has had the lowest reportable train accident frequency, as documented by the Federal Railroad Administration, among "class one" railroads in North America. 

Feb. 24, 2023, site of a Norfolk Southern freight train derailment, Feb. 3 in East Palestine, Ohio.

NTSB launches special investigation into Norfolk Southern safety

Citing six “significant accidents” involving Norfolk Southern since December 2021, the NTSB said it will probe the company's safety issues.


Dr. Patrick Penfield is a professor of supply chain management at Syracuse University.

"I don't disagree with that. They've got a great safety records, but nonetheless what's going to happen is, you're going to have less competition and prices will go up," he said.

Penfield fears the control the "class one" railroads have over the industry allows for cost cutting, but at what expense? 

"It's all about this oligopoly of "class one" railroads. They dominate the United States," Penfield continued. "I think because there's a lack of regulation and a lack of rules, I think that's what is happening. And companies are looking at the bottom line."

Officials with Canadian-Pacific did not immediately respond to Scripps News' request for comment.

But it's board says the merger will allow for the transportation of grain from the Midwest to Mexico and the Gulf Coast as well as intermodal freight, or those that can move goods easily from trains to trucks, between Dallas and Chicago.

Regulators in the U.S. have said the merger is expected to add more than 800 union jobs. 

The decision means Canadian-Pacific could gain control of Kansas City Southern as soon as next month.