(The following story by Bob Tita appeared on the Crain’s Chicago Business website on February 18.)
CHICAGO — E. Hunter Harrison thought he’d be cheered for breaking Chicago’s railroad bottleneck. Instead, the CEO of Canadian National Railway Co. is under attack.
Frustrated by the slow-moving and convoluted routes his trains are forced to take to traverse the region, Mr. Harrison struck a deal last fall to purchase the only available bypass on the periphery of Chicago’s railroad network: the little-used Elgin Joliet & Eastern Railway. Diverting Canadian National trains to the route would free up rail capacity elsewhere in the region, he says, allowing other freight railroads to operate faster and creating shorter waits for motorists at street crossings.
But communities along the 198-mile EJ&E route from Gary, Ind., to Waukegan are lobbying federal transportation officials to block the $300-million purchase. They say they shouldn’t have to live with almost two dozen additional freight trains a day for the sake of relieving the capacity constraints of Chicago’s rail network, the largest freight rail terminal in the country.
Passenger rail advocates, including the state of Illinois, are throwing cold water on the deal, too. They’re concerned that cash-strapped Amtrak would be left on the hook for maintaining Chicago tracks and bridges that CN would no longer need.
At stake for Chicago is the area’s status as a transportation and distribution hub. The region’s inadequate transportation infrastructure is the subject of a major rail-congestion relief program backed by the nation’s major railroads, the city of Chicago and state officials, but the $1.5-billion program has yet to be fully funded.
At the same time, local rail traffic has jumped as Asian imports have increased the need for cross-country hauling. Shippers are using trains more as highway congestion, high fuel prices and a shortage of drivers erode advantages the trucking industry once had over railroads. And with CN running freight through Chicago from a new port in British Columbia, traffic is only expected to increase.
“If somebody doesn’t do something to add capacity or improve the infrastructure in Chicago, you’re going to see railroads shifting to other gateways and a loss of economic benefits to this city,” says Mr. Harrison, 63, a native Tennessean who rescued Chicago-based Illinois Central Railroad from the brink of bankruptcy in the early 1990s and moved to CN when it acquired the railroad in 1998.
For Mr. Harrison, the EJ&E is one of the last missing pieces in a decade-long transformation of the Montreal-based railroad from a state-owned enterprise into a railroad capable of going toe-to-toe with larger U.S.-based rivals.
“Chicago clearly accounts for a higher percentage of our service failures than any other point on the railroad,” says Mr. Harrison, who began his career at age 17 in Memphis, oiling rail car wheel bearings.
But communities along the EJ&E think Mr. Harrison’s remedy will only create problems where none exist today. In Barrington, West Chicago, Plainfield and other towns, the EJ&E has been hardly noticed for decades. No more than a few trains a day pass over large portions of the route, which is owned by U.S. Steel Corp.
Houses, schools and fire stations sprang up near the tracks without plans for underpasses or regard for the line’s strategic potential for major railroads. There are 133 street crossings along the route; Plainfield alone has 16 crossings, with just one underpass.
“We don’t want freight shifted from where it is now in Chicago to communities that are not prepared for it,” says Barrington Village President Karen Darch, who maintains the railroad should put its money toward the government-backed infrastructure improvement program, called the Chicago Region Environmental and Transportation program, or Create.
Mr. Harrison says buying the EJ&E is a faster means of accomplishing his goals for the railroad.
But his move has alarmed passenger rail advocates. They worry that once the railroad has the EJ&E, it would push responsibility for maintaining its routes along the lakefront and in the South Loop onto cash-strapped Amtrak, which uses the tracks to reach Union Station.
“We want to know what the cost of that is,” says George Weber, acting director of the Illinois Bureau of Railroads, which provides $28 million a year for Amtrak service in the state. “What if bridges need repairs? That could be millions of dollars.”
CN says it can’t abandon any routes Amtrak is using without the passenger railroad’s cooperation. Mr. Harrison also says he’s willing to provide money for underpasses and other measures to ease the effect of more trains.
More than half of CN’s $7.38 billion in revenue last year came from the United States and cross-border shipments to and from Canada. Much of that business came through or to Chicago, where CN bought the Illinois Central a decade ago and Rosemont-based Wisconsin Central Railway in 2001. Last fall, the railroad began freight service between Chicago and its newly opened Pacific port in British Columbia to lure business away from rival railroads serving crowded California ports.
Mr. Harrison needs to move the new cargo through town faster.
“It ought to take four hours to get across Chicago, but sometimes it takes 48,” he says.