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Wednesday, March 23, 2022

The Russian War In Ukraine And Its Impact On Africa – Analysis

By 

When Vladimir Putin, the president of Russia, started sending thousands of soldiers and tanks to the border of Ukraine, many thought he just wanted to make a show of force. The two countries are very similar and were once very close. But this was no joke, in the least, Putin meant business. His hidden agenda is to absorb peaceful Ukraine into the Russian Federation on the ground that it is an act of self-defense in reaction to the West’s territorial encroachment that aims at surrounding Russia to weaken it.

Russian violation of national sovereignty and territorial integrity of a peaceful Ukraine

However, on February 24, 2022, the Russian army started to enter and bomb Ukraine. In truth, we have to go back in time a bit: things have been going badly between the two countries for at least eight years. In 2014, people in Kyiv, the capital, began to demand more freedom and closer ties with the European Union and the West. The Ukrainian president at the time, who was a friend of Russia, was even forced to flee.

Shortly thereafter, in response, Russia had already invaded a part of Ukraine, Crimea, which it considered its own. In another part of the east of the country, the Donbas, a first war broke out between those who wanted to move closer to Russia and those who feared that Ukraine would be cut into pieces. For eight years, several countries (including Switzerland) tried to bring peace between the Ukrainian brothers. But they did not succeed.

Vladimir Putin now explains that he wants to defend the Ukrainians who feel more Russian. According to him, they were “threatened” and they needed his help. However, he has also given a whole series of other justifications that blur his real objectives. For example, it seems that the Russian president does not really recognize Ukraine’s right to be an independent country from Russia. He also believes that if Ukraine moves closer to Western Europe, and especially if it becomes part of the military alliance that includes these countries as well as the United States and Canada (NATO), Russia will find itself surrounded by enemies.

In the past, Russia was a vast empire that extended far beyond its current borders. From his statements, Vladimir Putin seems to consider that he must forever maintain special ties with the other countries that made up this empire. But the vast majority of Ukrainians do not share this opinion at all, and they are ready today to defend their country.

The intensity and scale of the invasion of Ukraine by the Russian army is causing a humanitarian catastrophe of a severity not seen in Europe since the Second World War. This attack is led by one of the most powerful armies in the world against a country of 44 million inhabitants before the invasion. As proof of the violence of the fighting, over 3 million Ukrainians have already fled to neighboring countries, mainly to Poland.

Refugees are crossing to neighboring countries to the west, such as Poland, Romania, Slovakia, Hungary, Moldova, Belarus, and even Russia.

The UN says that as of March 14, 2022:

  • Poland had taken in 1,808,436 refugees
  • Hungary 263,888
  • Slovakia 213,000
  • Moldova 337,215
  • Romania 453,432
  • Russia 142,994
  • Belarus 1,475

The speed of this exodus is unprecedented. There are already more Ukrainian refugees in European countries than the number of Syrians who fled the war in their country in 2015. At the time, there was talk of a refugee “crisis.” Europe, with the exception of Germany, had closed its borders. Today, the attitude towards the Ukrainians is quite different. But how long will the countries bordering Ukraine be able to cope with this influx?

Ukrainians trapped in bombed-out cities

The situation is even more dramatic inside Ukraine. After failing to quickly take the capital, Kyiv, to replace the Ukrainian government, the Russian army has stepped up its bombing in an attempt to break the Ukrainians’ resistance. The strikes on densely populated cities are causing many casualties among the inhabitants.

According to the UN, hundreds of civilians have been killed since the beginning of the invasion on February 24,2022. But these are only the deaths that could be confirmed. The human toll is likely to be much higher. And the death and injury toll will continue to rise as long as the war continues.

As of Sunday, March 13, 2022, at least 636 civilians have died in Ukraine since the Russian invasion began, the UN Human Rights office (OHCHR) said Monday in a statement.

According to the agency, at least 1,125 civilians have been injured so far: 

“Most of the civilian casualties recorded were caused by the use of explosive weapons with a wide impact area, including shelling from heavy artillery and multi-launch rocket systems, and missile and air strikes,”

the agency said.

“OHCHR believes that the actual figures are considerably higher, especially in Government-controlled territory and especially in recent days, as the receipt of information from some locations where intense hostilities have been going on has been delayed and many reports are still pending corroboration,”

it added.

Besides, hundreds of thousands of Ukrainians are trapped in bombed-out cities. Some of them are surrounded by the Russian army. In the besieged cities, the population is finding it increasingly difficult to find drinking water or food. Negotiations between Ukraine and Russia continue, despite the fighting, to evacuate the population of several cities. But, for this, ceasefires are needed so that the inhabitants can be evacuated.

This is the first time that war has occurred in a country with so many nuclear reactors. Moreover, the worst accident in the history of civil nuclear power occurred in Ukraine in 1986, when a reactor exploded in Chernobyl and caused the death of many people. Today, nearly 2600 km² remain off-limits around the site because of radioactivity. However, this area has been invaded by the Russian army, as well as the nuclear power plant of Zaporijjia (six reactors), in the south of Ukraine.

Africa cannot remain indifferent to the Russian aggression

As the war in Ukraine continues, the African Union has clarified its position by condemning the Russian invasion. In such political crises, Africa has often refrained from revealing its position, a move often interpreted as the reason for its inaudible position on the international scene.

But this time, the continent could hardly remain indifferent to the Russian invasion, especially since Moscow also has close relations with several African countries.

The current chairman of the African Union (AU), Macky Sall, and the chairman of the AU Commission, Moussa Faki Mahamat, expressed their extreme concern about the very serious and dangerous situation created in Ukraine.

In their statement, they called on the Russian Federation and any other regional or international actor to imperatively respect international law, territorial integrity, and national sovereignty of Ukraine.

The current Chairman of the African Union and the Chairman of the African Union Commission urged both parties to the immediate establishment of a ceasefire and the opening without delay of political negotiations under the auspices of the United Nations, in order to save the world from the consequences of a global conflict, for peace and stability in international relations for the benefit of all peoples of the world.

On another level, African countries are concerned about the fate of their nationals who try to leave the country. They also remember the aid that used to come from Russia and Ukraine.

The current Chairman of the African Union and President of the Republic of Senegal, H.E. Macky Sall, and the Chairperson of the African Union Commission, Moussa Faki Mahamat, are following closely the developments in Ukraine and are particularly concerned about reports that African citizens on the Ukrainian side of the border are being denied the right to cross the border to safety.

Both Presidents reiterate that all persons have the right to cross international borders during conflict and, as such, should have the same rights to cross the border to safety from the conflict in Ukraine, regardless of their nationality or racial identity.

Reports that Africans are subject to unacceptable differential treatment are offensive and racist and violate international law. In this regard, the Presidents urge all countries to respect international law and to show equal empathy and support to all people fleeing war, regardless of their racial identity.

The Chairpersons commend the extraordinary mobilization of the AU Member States and their Embassies in neighboring countries to receive and guide African citizens and their families who are trying to cross the border of Ukraine to safety.

African states’ reaction to the war in Ukraine

Africa represents more than 25% of the seats in the UN General Assembly. In a vote on a resolution condemning Russian military aggression, only Eritrea voted against the resolution, while 28 African countries condemned the Russian action. But 17 African countries abstained and 8 other countries did not take part in the vote. How to explain the different positions within the African continent?

We should rather speak of “the” Africas, insofar as Africa is not a monolithic block and the contingency of international relations means that many reactions are due to national issues. Kenya’s reaction at the UN Security Council is enlightening in this respect: the Kenyan representative calmly recalled that the African continent had been colonized by the great European powers and that the populations had been separated by the borders drawn, but that this did not mean that there were incessant wars because the African states had learned to live with this division. This is a good lesson for Russia. It should be noted that the representative recalled from the outset the sacrosanct principle of the intangibility of borders, a principle affirmed by the Organization of African Unity (OAU) in 1963.

This explains the cautious reactions: the African Union does not condemn, but calls for respect of international law and the sovereignty of Ukraine. This does not mean that African states support Russia: on the contrary, none, not even Mali or the Democratic Republic of Congo where Russia is present with the Wagner company, have given their support to the invasion. What might appear to be diplomatic prudence is not so insignificant when a nuclear power flouts international law.

However, this prudence can be explained by two main factors:

  • The risks of separatism faced by certain African states, and;
  • Their dependence on Russia, particularly in terms of grain. Tunisia and Egypt import wheat, notably from Russia and Ukraine.

We can see that the current situation is also summed up by the power games between the West and Russia. There is no distinction made between NATO and the West. It is interesting to follow the distinction that could be made between the cautious diplomatic positioning of the diplomats and the more assertive and clearly pro-Russian public opinions. They have nothing to do with a form of the third way. On the contrary, they share with Russia a rejection of Western values and denounce a form of Western hypocrisy, which condemns the invasion of Ukraine but has not hesitated to intervene in Syria, Libya, or Afghanistan. The double standard is denounced. From the Afro Barometers, we see that the share of positive popular perceptions of Russia and China has increased significantly over the past five years. This reflects Russia’s economic, political and military commitment, but also the role of its propaganda media.

There is also some African ambiguity about Russia, with the public seeing Putin as a strongman who would therefore have the right to decide on a country’s future security alliances while being very concerned about their sovereignty. It seems to him that there is a great deal of Russian political mythology, disseminated and maintained by Putin, that is shared by African populations: moral equivalence between Russian and NATO interventions, strong anti-imperialism, anti-Americanism, the politics of humiliation, the feeling that history is written by the victors. All this will be interesting to follow. 

The international order, a few years ago, was still unipolar. We are now moving towards a bipolarization. It is an unstable, interdependent system. However, it is not in the interest of any state to declare itself at odds with international law, especially small states, for whom international institutions are power relays.

Grains at the center of geopolitics

Wheat and other grains are once again at the center of geopolitics after Russia’s invasion of Ukraine. With both countries playing a major role in the global agricultural market, African leaders need to pay attention.

Agricultural trade between the continent’s countries and Russia and Ukraine is significant. African countries imported $4 billion worth of agricultural products from Russia in 2020. About 90% of these products were wheat, and 6% were sunflower oil. The main importing countries were Egypt, which accounted for almost half of the imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya, and South Africa.

Similarly, Ukraine exported $2.9 billion worth of agricultural products to the African continent in 2020. About 48% of these products were wheat, 31% corn, and the rest was sunflower oil, barley, and soybeans.

Russia and Ukraine are major players in the global commodity market. Russia supplies about 10% of the world’s wheat, while Ukraine produces 4%. Collectively, this represents almost the entire wheat production of the European Union. This grain is intended for domestic consumption and export markets. Together, these two countries account for a quarter of global wheat exports; in 2020, they amounted to 18% for Russia and 8% for Ukraine.

These two countries are also key players in the corn sector, with a combined production of 4%. However, when it comes to exports, Ukraine and Russia’s contribution is much larger, with 14% of global corn exports in 2020. They are also among the leading producers and exporters of sunflower oil. In 2020, Ukraine’s sunflower oil exports accounted for 40% of global exports, compared to 18% for Russia.

Russia’s military action has caused panic among some analysts, who fear that the intensification of the conflict could disrupt trade, with serious implications for global food stability.

I share these concerns, particularly with regard to the consequences of a spike in global grain and oilseed prices. These are among the driving forces behind the rise in global food prices since 2020. This is mainly due to droughts in South America and Indonesia, which have led to crop failures, and increased demand in China and India.

The disruption of trade, due to the invasion, in this important Black Sea grain-producing region would contribute to higher international agricultural commodity prices, with potential negative impacts on global food prices. An increase in commodity prices was visible only days after the conflict began.

This is a concern for the African continent, which is a net importer of wheat and sunflower oil. In addition, there are concerns about drought in some parts of the continent. The disruption of shipments of essential commodities would only add to the general concern about food price inflation in a region that imports wheat.

War in Ukraine: what consequences for the African economy? 

The war in Ukraine has, undoubtedly, terrible consequences on the African economy: an increase in the price of gas, oil, agricultural raw materials. The invasion of Ukraine by Russia risks destabilizing the African economy still in remission of the COVID 19 pandemic.

In an interconnected world, any conflict can have repercussions beyond the battlefield. Africa will not be spared the economic and political consequences of Russia’s invasion of Ukraine, observes the continent’s press.

The lasting relationship that Russia has built with Africa will be put to the test by the current crisis in Ukraine, analysts tell the Pan-African website Africanews.

Thus, on the Pan-African level, through the voice of its current chairman Macky Sall, the African Union (AU) was quick to express extreme concern about the very serious and dangerous situation created in Ukraine, while calling on Russia to imperative respect for international law, territorial integrity and national sovereignty of Ukraine.

Officially, South Africa is on the side of peace. In a letter to the nation published Monday, March 7, 2022, President Cyril Ramaphosa called for a resolution of the conflict between Russia and Ukraine through dialogue. This position is in keeping with the restraint that characterizes South African diplomatic practices, even if the Russian influence within the ruling African National Congress (ANC) raises questions.

On the first day of the Russian invasion, February 24, 2022, South Africa surprised everyone by calling on Russia, through its Department of International Relations (the Ministry of Foreign Affairs), to immediately withdraw its forces from Ukraine. The stance came as a surprise, since South Africa, which is also a member of the BRICS group (along with Brazil, Russia, India, and China) and is close to Moscow, is usually more measured in its diplomacy. It was quickly followed by unease within the executive.

Another reaction came from Morocco, which indicated through its Foreign Ministry that it was following with concern the evolution of the situation between the Russian Federation and Ukraine, reports the Moroccan website Le 360.

As for Algeria, a historical ally of Russia, it simply called on its citizens in Ukraine to respect the security instructions, reports Dzair Daily.

In the African press, the most glaring concern is about grain imports from Ukraine and Russia and the fear of disruptions in supply and prices, says Africanews. The Continent has the same analysis, recalling the importance of Russian wheat.

The Tunisian Central Bank decided to maintain its key rate at 6.25%, during a meeting of its board of directors held on Monday, March 14, 2022. The announcement comes in a context marked by global inflation which has affected commodity prices. Internationally, the Tunisian Central Bank is following with great attention the fallout from the Russian-Ukrainian war on global business, on supply chains, and on the international prices of raw materials and basic foodstuffs, which are likely to have a strong impact on inflation, the institution said.

UN Secretary-General Antonio Guterres warned on Monday, March 14 2022 that the repercussions of Russia’s war in Ukraine could result in a hurricane of famine in many countries. Highly dependent on imports of wheat and other essential foodstuffs, most countries around the Mediterranean and the rest of the continent are preparing to suffer a major shock.

The outlook for African countries is bleak in the wake of the war in Ukraine. The cessation of exports of cereals, including wheat, and other agricultural inputs, will hit most of them hard, as they are already facing a structural food crisis (climatic disturbances, conflicts) or have been considerably weakened by price increases and stock market speculation on essential products.

Moscow and Kyiv account for 34% of trade in wheat, a commodity that has increased by 70% since the beginning of the year. The countries around the Mediterranean are suffering greatly. For Egypt, this represents 80% of imports. It is the largest importer of wheat in the world (12 million tons). The country has three or four months of stock, estimates Jean-François Loiseau, president of the French cereal interprofession Intercéréales. The price of bread has jumped by 50% since the beginning of the Russian invasion of Ukraine. Cairo is considering an increase in the price of the subsidized wafer intended for low-income earners. A risk not taken since the bread riots of 1977.

This is a source of concern for other countries in the region, such as those in the Sahel and West Africa, historically net importers of food. Algerians, for example, remember the riots of 2011 following a sudden surge in oil and sugar prices that spilled over into other consumer goods. In some areas of Algiers, stores were stormed by groups of young people. Demonstrations broke out 250 km away in the city of Béjaïa, in Kabylia, and as far away as Constantine, the capital of the east of the country. However, Algiers is hoping to cushion this shock with additional earnings from gas exports, just like Morocco for phosphates, whose price is rising.

On the other hand, the food insecurity from which the poor populations in Lebanon, Yemen, Syria and Sudan, torn by internal conflicts, are already suffering, is going to increase. According to the UN Food and Agriculture Organization (FAO), world food prices reached a record high in February, up 3.9% from January.

Europe and Africa will be very deeply destabilized in terms of food in the next 12 to 18 months, warned Emmanuel Macron on Friday, March 11, 2022, at the end of a European summit in Versailles (Informal meeting of heads of state or government, Versailles, 10-11 March 2022.) Beyond this observation, African countries need a real safeguard plan to avoid the explosion of famine feared by the World Food Program (WFP).




Dr. Mohamed Chtatou

Dr. Mohamed Chtatou is a Professor of education science at the university in Rabat. He is currently a political analyst with Moroccan, Gulf, French, Italian and British media on politics and culture in the Middle East, Islam and Islamism as well as terrorism. He is, also, a specialist on political Islam in the MENA region with interest in the roots of terrorism and religious extremism.

Saturday, July 23, 2022

Transport Canada Invests in Saskatchewan

  • Written by David C. Lester, Managing Editor, Railway Track & Structures  
  • image description

    Canadian Pacific photo

    Canada’s supply chain is still feeling the impacts of the pandemic, and the Government of Canada says it “is committed to addressing this by strengthening Canada’s supply chains and trade corridors, which will grow the economy and mitigate global inflation.”

    Minister of Transport Omar Alghabra announced C$18.3 million in funding for four new projects under the National Trade Corridors Fund, “which will help to improve the efficiency of rail networks in Regina and southern Saskatchewan”:

    Regina, Sask. OpenRailwayMap.org
    • C$1 million to develop a preliminary design to relocate railroad crossings in Regina, Saskatchewan (above). The City of Regina is contributing the remaining amount for a total investment of C$2.4 million.
    • C$13.5 million for a railway grade stabilization project, where extensive railway work will be undertaken on the Canadian Pacific interchange near Eston, Saskatchewan. Last Mountain Railway will contribute an equal amount for a total investment of C$27 million.
    • C$1.6 million for a new pre-interchange yard on the Canadian Pacific interchange near the town of Assiniboia, Saskatchewan, which will increase operating interchange capacity, allowing increased traffic flow and improved fluidity. Great Western Railway will contribute an equal amount for a total investment of C$3.2 million.
    • C$2.2 million to build 12,000 feet of additional track to address congestion issues at the interchange between the Stewart Southern Railway (former CP Tyvan Subdivision) and Canadian Pacific in Lajord, Saskatchewan (below). Purely Canada Foods will contribute the remaining funding toward the project for a total investment of more than C$6.5 million.
    Lajord, Sask. OpenRailwayMap.org

    “Through the National Trade Corridors Fund, the Government of Canada is investing in well-functioning trade corridors to help Canadians compete in key global markets, trade more efficiently with international partners, and keep Canadian supply chains competitive,” Alghabra said. “This is part of the Government of Canada’s long-term commitment to work with stakeholders on strategic infrastructure projects to address transportation bottlenecks, vulnerabilities, and congestion along Canada’s trade corridors.

    “An efficient and reliable transportation network is key to Canada’s economic growth. The Government of Canada, through the National Trade Corridors Fund, is making investments that will support the flow of goods across Canada’s supply chains. The National Trade Corridors Fund is a competitive, merit-based program designed to help infrastructure owners and users invest in the critical transportation assets that support economic activity in Canada. Under this program, a total of C$4.6 billion over 11 years (2017-2028) has been announced. Budget 2022 provided C$450 million over five years, starting in 2022-23, to support supply chain projects through the National Trade Corridors Fund, which will help ease the movement of goods across Canada’s transportation networks.”

    Transport Canada administers the National Trade Corridors Fund, “which supports improvements to Canada’s roads, rail, air, and marine shipping routes to foster domestic and international trade.” Provincial, territorial, and municipal governments, Indigenous groups, not-for-profit and for-profit private-sector organizations, some federal Crown corporations, and academia are all eligible for funding under the National Trade Corridors Fund.

    Editor-in-Chief William C. Vantuono contributed to this story.

    CP, KCS to STB: CPKC ‘Compellingly in the Public Interest, Should Be Approved Without Conditions’

  • Written by William C. Vantuono, Editor-in-Chief July 14, 2022
    image description

    KCS and CP locomotives at the top of the westbound grade at the Continental Divide in Crowsnest Pass, Alberta. Photo by David Duffin

    The document exceeds 4,300 pages: Canadian Pacific’s and Kansas City Southern’s Surface Transportation Board filing on their merger: “Applicants’ Response to Comments and Requests for Conditions, Opposition to Responsive Applications, and Rebuttal in Support of the Application.”

    The entire filing can be accessed from the STB website. The Filing ID is 304973. Here’s a summary of the points that CP and KCS make in response to the numerous comments and condition requests various parties have thus far filed with the STB: 

    “As we demonstrate in the Application and the evidence and argument submitted herewith, the Application is compellingly in the public interest and should be approved without conditions beyond those embodying the commitments Applicants are making … to ensure that the public interest benefits of the combination of CP and KCS come to pass,” the merger partners say in their introduction. “The transaction is supported by hundreds of shippers, short lines, passenger rail interests, labor organizations, and others. No shipper or shipper association requests that the transaction be denied. The Federal Railroad Administration endorses Applicants’ Safety Implementation Plan. Amtrak and other passenger rail interests support the transaction. Amtrak stresses ‘CP’s excellent record as an Amtrak host railroad and CP’s commitments to Amtrak’s efforts with states and others as detailed in the agreement’ reached between Amtrak and CP, and believes that the CP/KCS transaction ‘promises significant public benefits for the U.S. rail network.’ What opposition there is comes principally from the five Class I railroads. The protection these Class I railroads seek is itself evidence that they see the CP/KCS transaction an injecting new competition into the North American rail network.” 

    Point By Point 

    • “The transaction will result in significant public benefits. There is no merit to claims by Class I rivals that CPKC will not provide valuable new competitive options. The Class I critique of CPKC traffic estimates misses the fundamental point that the stronger competition that comes with the transaction is what really matters. [Our] estimates of the traffic CPKC will attract are reasonable and sound [and] are validated by the transaction’s Extensive shipper support and real-world developments. The KCS Board’s highly conservative pre-agreement synergies Estimates do not Undermine applicants’ anticipated benefits. There is zero risk to CPKC’s financial viability and continued investment, regardless of how much new traffic is attracted to the CPKC system, or at what rates. The Class I critique of the operating efficiencies generated by the transaction is invalid. CN’s continuing criticisms of the operating plan lack merit and are irrelevant to the Board’s evaluation of the transaction’s impacts.

    • “There is no basis for concern about ‘vertical’ competition. The Board has extensive experience with end-to-end mergers and the net benefits they have brought. Commenters offer no new economic or other learning that calls into question the Board’s consistent precedents and factual conclusions. KCS has not used its control of Tex Mex and KCSM to foreclose UP or BNSF routings through the Laredo Gateway, and neither will CPKC. The same forces that ensured there was not foreclosure following KCS/Tex Mex and other cases will apply here. [Our] commitments—enforced as appropriate by shippers—are the tried-and-true way to address concerns about vertical foreclosure. The rate-setting mechanism proposed by UP and BNSF is both unnecessary and would be affirmatively anticompetitive. Shipper group desires for “open access” and other reregulatory remedies are not merger-related. Certain requests relating to “gateways” and “bottlenecks” represent an improper effort to revisit the Board’s bottleneck rate rules. Requests for “reciprocal switching access” are similarly unrelated to this transaction

    • “The transaction will not lead to service disruption.  Additional service-related conditions would unduly burden CPKC’s competition for no valid purpose.

    • “Basic features of the transaction will prevent CPKC traffic growth from overwhelming rail capacity. The transaction will not cause disruption on the Lines KCS shares with UP and BNSF in Texas. UP and BNSF proceed from the false premise that CPKC Needs their permission to Use shared trackage to compete against them. The facts show that CPKC’s potential new trains will not exceed capacity on UP/BNSF trackage rights segments in Texas. There will be no capacity shortfall in the Houston Terminal complex. There is adequate capacity on the UP-owned Lines between Houston and Beaumont. Concerns about the Neches River Bridge at Beaumont are unwarranted. There is adequate capacity on the UP-owned Lines between Victoria and Robstown. UP and BNSF demands that CPKC fund 100% of any new infrastructure is overreaching and inappropriate. There will be adequate capacity for the traffic that CPKC hopes to attract elsewhere on its network.

    • “The transaction will not adversely Impact Metra’s commuter services and will not meaningfully increase freight traffic on lines shared with Metra. Metra further misunderstands the transaction’s impacts because its expert’s RTC model is fundamentally flawed. The MD-W Line west of Bensenville Yard has ample capacity to accommodate eight additional daily freight trains. Developments independent of the transaction will further improve the performance of Metra’s trains on lines shared with CP, which values its partnership with Metra and regrets that Metra’s comments have mischaracterized Metra’s solid performance on lines shared with CP. Metra has consistently performed well on CP’s lines. CP leadership is committed to supporting Metra’s operations, consistent with its contractual obligations. None of Metra’s complaints about CP are related to the transaction; most of Metra’s pre-transaction dispatching concerns relate to operations that will be unaffected by the transaction. Dispatching Metra trains on the ‘wrong track’ is a pre-transaction concern without merit. Pre-transaction issues having no bearing on this proceeding. Metra’s complaints about PTC implementation issues are irrelevant and unfair. [We] are committed to reassure Metra and its ridership that the transaction will not impact Metra’s passenger service. Metra’s requests to force a shift of dispatching to Metra would override CP’s contractual rights and undermine rather than improve the handling of Metra trains. Metra has long sought control of dispatching on the MD-W and MD-N Lines; the Board’s precedents sharply disfavor forced shifts in dispatching. Transferring dispatching control to Metra would create more issues than it resolves. Metra’s request to alter the compensation terms of the CP/Metra agreement are overreaching. Demands for hundreds of millions in new infrastructure are either wildly overreaching or already in progress. Metra’s request for a binding standard and process for schedule changes and new trains improperly seeks to improve its contractual rights. Metra’s requested oversight conditions are inappropriate and unnecessary .

    • “The Board should Reject CN’s proposed ‘inconsistent’ purchase of CPKC’s Springfield/East St. Louis Line. CN’s gambit is yet another round in CN’s effort to disrupt or delay the CP/KCS transaction. There is no competitive harm to address. Any divestiture of the Springfield/East St. Louis Line would harm the public interest, not enhance it. If CN is right about the ‘truck diversion’ potential of joint investments in the Springfield Line, a divestiture would not be necessary to achieve it. Were the Board to conclude that a remedy is required, it should not order a sale of the line, much less specify CN as the buyer. 

    • “Norfolk Southern’s requested relief is based on a misreading of the operating plan and would inappropriately alter pre-existing contractual rights to NS’s commercial advantage. CPKC will be highly motivated to continue to reap the rewards of the successful Meridian Speedway LLC joint venture. The facts contradict NS’s concerns about service impacts. The Wylie Intermodal Terminal has ample capacity to support [our] projected traffic increases. NS’s proposed contingent trackage rights make no sense as a ‘remedy’ for potential service concerns. NS’s request for contingent trackage rights would improperly convey to NS commercial rights that NS did not negotiate or pay for in 2006. 

    • “The Board should reject the relief requested by CSX. CSX’s arguments about the Meridian Speedway are unrelated to the transaction and should be ignored. CPKC will be eager to maintain or explore efficient interline relationships with CSX via all available gateways, and there is no need for relief protecting CSX. 

    • “BNSF’s veiled threats to demand future trackage rights it chose not to seek in this proceeding should be rejected with prejudice. BNSF’s desire for Board intervention in support of its quest for a future Mexican concession is not merger- related and would improperly involve the Board in Mexican affairs. BNSF’s proposed rights between Dallas and Shreveport would grant commercial rights BNSF chose not to acquire. BNSF’s proposed rights between Savanna, Ill. and Clinton, Iowa would grant commercial rights BNSF has previously sought. 

    • “The Board should not grant Union Pacific’s demand for conditions granting compulsory access to KCS’s self-funded new bridge at Laredo.

    • “The Coalition [to Stop CPKC] communities demand mitigation measures disproportionate to the likely effects on the community. Hennepin County concerns fail for similar reasons. The Sierra Club’s requested conditions have no nexus to the transaction, which is expected to lower greenhouse gas emissions.

    • “Concerns about CP’s tariff provisions applicable to hazardous shipments are not competitive issues or transaction-related and should be rejected. Concerns of certain wheat growers’ associations about potential competition from Canadian grain suppliers reflect more competition, not less … The late-submitted concerns of certain Federal Maritime Commissioners about diversions to Canadian ports are meritless.”

    CPKC: CN, NS Seek Conditions

    Written by Marybeth Luczak, Executive Editor

    The Surface Transportation Board (STB) on July 1 accepted for consideration responsive applications by CN and Norfolk Southern (NS) regarding the Canadian Pacific-Kansas City Southern merger, which is under STB review and seeks to create North America’s first transnational freight railroad, Canadian Pacific Kansas City, or CPKC.

    CP and KCS in September 2021 agreed to combineSTB in November 2021 accepted their application to form CPKC.

    CP and KCS on May 13, 2022, submitted a revised operating plan as ordered by STB, and CN and NS on June 9 filed amended responses with each railroad requesting a number of conditions, including acquisition of the Springfield Line in Illinois and Missouri as well as certain trackage rights.

    CN and its U.S. subsidiary Illinois Central Railroad Company (ICRR) seek, as a condition to any approval of the CP-KCS merger, approval of the sale of KCS’s line between Kansas City, Mo., and Springfield and East St. Louis, Ill., to ICRR.

    “In connection with the line acquisition, ICRR also seeks acquisition of an 8.33% ownership share of Kansas City Terminal Railway Company (KCT), which would enable ICRR to operate over KCT-controlled trackage in Kansas City, and a 50% ownership interest in KCS’s International Freight Gateway terminal (IFG Terminal) south of Kansas City,” among other conditions, according to the STB decision (download below).

    STB reported that NS is pursuing “certain contingent trackage rights for overhead movement on KCS’s line, between the connection of KCS with the Meridian Speedway, at Shreveport, La., at or near milepost V-169.85, and the Wylie Intermodal Terminal, in Wylie, Tex., at or near milepost T-197,” as a condition to any approval of the CP-KCS merger. The contingent trackage rights would apply only to intermodal traffic originating or terminating at the Wylie Intermodal Terminal, according to STB.

    STB reported that it found “CN and NS’s responsive applications to be in substantial compliance with the regulations under which they were filed and finds no basis for rejecting them. The Board reserves the right to require supplemental information, if necessary. The Board also finds that it is not necessary to designate CN and NS’s proposed transactions as minor or significant.”

    Formal written comments regarding the responsive applications are due by July 12, 2022. They must include “the commenter’s position in support of or in opposition to the transaction proposed in the responsive filing; any and all evidence, including verified statements, in support of or in opposition to the proposed transaction; and specific reasons why approval of the proposed transaction would or would not be in the public interest,” according to STB, which provides more information on filing requirements on its website.  

    In related developments, Bob Knief, President of Bartlett Grain Co., LP, a leading U.S. exporter of grain to Mexico, submitted a statement on June 22 to STB to address comments and applications filed on the CP-KCS merger; specifically, Bartlett urged STB to approve the merger and reject CN’s request that KCS’s Springfield Line be divested to it.

    Canada Investing $4.4MM to Improve Hudson Bay Railway Corridor Safety

    Written by Marybeth Luczak, Executive Editor
    “Our new investment will not only improve the safety and efficiency of Canada’s railways, but also strengthen our supply chain and tackle inflation by addressing bottlenecks, vulnerabilities and congestion along Canada’s trade corridors,” reported Transport Canada Minister Omar Alghabra reported in a July 13 Twitter post. (Photograph Courtesy of Alghabra via Twitter)

    “Our new investment will not only improve the safety and efficiency of Canada’s railways, but also strengthen our supply chain and tackle inflation by addressing bottlenecks, vulnerabilities and congestion along Canada’s trade corridors,” reported Transport Canada Minister Omar Alghabra reported in a July 13 Twitter post. (Photograph Courtesy of Alghabra via Twitter)

    The government of Canada is committing C$4.4 million to identify potential mitigation strategies for permafrost hazards along the Hudson Bay Railway corridor in Manitoba, reported Minister of Transport Omar Alghabra on July 13.

    The University of Calgary will undertake the study, and the results will be used “to ensure the safety and resiliency” of the corridor, which includes 627 miles of former CN trackage, according to Transport Canada. The funding is being provided through the National Trade Corridors Fund, which is described as “a competitive, merit-based program designed to help infrastructure owners and users invest in the critical transportation assets that support economic activity in Canada.”

    Hudson Bay Railway (map above) is made up of 627 miles of former CN trackage. The network connects with CN in The Pas, running north through Manitoba to the Hudson Bay at the Port of Churchill. (Map Courtesy of Arctic Gateway Group)

    “The Hudson Bay Railway corridor is a critical transportation, supply and tourism link for communities along the route, connecting Manitoba from north to south,” said Daniel Vandal, Canada’s Minister of Northern Affairs, and the Minister responsible for Prairies Economic Development Canada and for the Canadian Northern Economic Development Agency. “It also strengthens local economies by connecting the Port of Churchill to producers across the Prairies, supplying the world with Canada’s agricultural products and other goods. This funding will help address the hazards and impacts of climate change along the railway, keeping Indigenous and northern communities in Manitoba connected and safe.”

    “Canada’s rail network is crucial to our supply chain,” said Minister Alghabra, who made the announcement at the CN Intermodal Terminal in Winnipeg. “Through the National Trade Corridors Fund and Rail Safety Improvement Program funding, we are addressing the impacts of climate change and improving the safety and resiliency of Manitoba’s rail network, thereby strengthening Canada’s trade corridors.”

    Transport Canada last month announced that the Rail Safety Improvement Program for 2022-23 would distribute C$24 million to 147 grade crossing, infrastructure and research projects; C$700,000 in funding will go toward 10 projects in Manitoba.

    In related developments, Transport Canada on July 5 announced new fire-mitigation rules and a research-funding program to help railroads improve safety and security and build “climate resiliency.”

    Pictured, right: Transport Canada Minister Omar Alghabra. (Photograph Courtesy of Alghabra via Twitter)

    NWT Unity Rail Port Under Way

    Written by William C. Vantuono, Editor-in-Chief JULY 6, 2022

    NWT photo

    North West Terminal Ltd. (NWT), an independent farmer/shareholder-owned company headquartered near Unity, Saskatchewan in the Northwest region of the province that owns and operates an inland grain terminal and fermentation facility, is developing Unity Rail Port, a processing and transportation hub.

    Phase 1 of Unity Rail Port is expected to encompass almost 75 acres of sublots for lease within the limits of the Town of Unity. Phase 2 is expected to include just over 210 acres of sublots for lease in the Rural Municipality of Round Valley. Phase 1 and 2 are located to the West and North, respectively, of a rail infrastructure expansion under way at NWT. The expansion is expected to include a dual loop track. 

    “Unity Rail Port will be unique as it is expected to offer prospective tenants access to: Canadian Pacific (Wilkie Subdivision)and CN; grain sourcing and procurement services through NWT’s elevator facilities; and other transloading resources.,” the company said. “As well, the hub is situated on the intersection of two major highways and currently boasts more than 200 railcar spots. 

    OpenRailway Map.com

    “The Board of Directors is pleased to be announcing this project,” said NWT President Brad Sperle. “We have a solid foundation here at Unity as we already produce plant-based protein and renewable energy at our fermentation facility, have a long list of local-farmer customers, and have an existing tenant that transloads lumber, among other things, from truck to rail. We want to continue expanding on these types of opportunities and attract tenants that have synergies with our existing infrastructure. We are also looking at the potential to make the hub green in the future by offering renewable power and carbon sequestration.”

    In addition to its inland-grain terminal and fermentation facility at Unity, NWT is also a minority owner of Alliance Seed Corp. (ASC) in Winnipeg, Manitoba, and Alliance Grain Terminal Ltd. (AGT) in Vancouver, British Columbia.

    For Canada, New Measures to Address Extreme Weather, Climate Change Impacts on Rail

    Written by Marybeth Luczak, Executive Editor 
  • “In a period where we are seeing the impacts of climate change and extreme weather in Canada, it’s important that we do everything we can to mitigate future risks,” Minister of Transport Omar Alghabra said on July 5.

    “In a period where we are seeing the impacts of climate change and extreme weather in Canada, it’s important that we do everything we can to mitigate future risks,” Minister of Transport Omar Alghabra said on July 5.

    Transport Canada on July 5 announced new fire-mitigation rules and a research-funding program to help railroads improve safety and security and build “climate resiliency.”

    Under the new rules for the fire season (April 1 to Oct. 31), Transport Canada is requiring rail companies to:

    • Reduce train speeds and conduct additional track inspections when temperatures are high to reduce the risk of a derailment caused by track conditions.
    • Inspect locomotive exhaust systems more frequently to ensure they are free of any deposits that could pose a fire risk.
    • Implement a fire risk reduction plan, which “requires companies to monitor fire risk levels, manage vegetation, reduce activities that could spark fires, and respond to detected fires.” Companies must also engage local governments and Indigenous communities on their plans.

    The new rules make permanent the measures contained in Ministerial Order 21–06, issued in July 2021, to reduce the risk of wildfires in the context of extreme weather, according to Transport Canada, which noted that they also complement recent revisions to the Rules Respecting Track Safety. “Rules and regulations have the same force of law, under the Railway Safety Act, and a railway company can be subject to monetary penalties or prosecution for non-compliance to a rule,” the government agency added.

    Additionally, the Rail Climate Change Adaptation Program has been launched “to support research, development and implementation of innovative technologies, tools and approaches to better understand and address the increasing risks and impacts of climate change on Canada’s rail sector,” according to Transport Canada.

    The program will provide up to C$2.2 million in contribution funding to “cost-share” research, according to the government agency. Federally or provincially regulated railway companies incorporated in Canada—including CN and Canadian Pacific as well as most short lines—have until Sept. 28, 2022, to submit projects for consideration.

    “In a period where we are seeing the impacts of climate change and extreme weather in Canada, it’s important that we do everything we can to mitigate future risks,” Minister of Transport Omar Alghabra said. “Our new rules will protect our railways against wildfires in the context of extreme weather. At the same time, the new Rail Climate Change Adaption Program will help railways assess and adopt next-generation tools to mitigate adverse issues caused by climate change.”

    ESG Briefs: CN/CP, CSX, OmniTRAX

  • Written by Marybeth Luczak, Executive Editor July 05, 2022

    CSX and subsidiary Quality Carriers employees recently assembled 5,000 care packages for U.S. troops stationed in Eastern Europe, who have been mobilized in response to the conflict in Ukraine. (Photograph Courtesy of CSX)

    CN and Canadian Pacific (CP) have earned spots on the Best 50 Corporate Citizens in Canada list for 2022. Also, care packages from CSX, in partnership with Operation Gratitude, are headed to U.S. active-duty service members in Eastern Europe; and Newburgh & South Shore Railroad (NSR), a managed affiliate of OmniTRAX, presented a community donation to a Cleveland, Ohio-area fire department in honor of Charter Steel.

    CN and CP have ranked on the Corporate Knights Best 50 Corporate Citizens list. They came in at No. 35 and No. 17, respectively. Both Class I railroads were part of the “Freight Transport, All Modes” category, one of 18 included. Other industry groups ranked were: WSP Global Inc., No. 6 (“Engineering Construction”); Societe de Transport de Montreal, No. 10 (“Transit and Ground Transportation”); and Aecon Group Inc., No. 46 (“Engineering Construction”).

    To determine the rankings, Corporate Knights magazine analyzed 332 large Canadian organizations against Canadian and global industry peers. It assessed companies’ performance using 24 quantitative key performance indicators (KPIs) related to resource management, employee management, financial management, clean revenue, clean investment and supplier performance. The magazine has produced the annual list since 2002.

    “Large Canadian companies now earn almost a quarter (24%, up from 18% in 2021) of their total revenues ($113.6 billion) from products and services that have a beneficial environmental or social impact, as determined by the Corporate Knights Clean Taxonomy, which is aligned with the United Nations Sustainable Development Goals (SDGs),” Corporate Knights reported. “Best 50 companies continue to lead the way, earning 37% of their revenues in line with the clean economy. That’s six times more than the 6.2% clean revenue earned by other big Canadian companies (excluding the Best 50).”

    “Almost no companies had net-zero commitments five years ago, but the tides are changing,” Corporate Knights noted. “Today, 40% of large companies around the world have net-zero commitments (by market capitalization). Even among Canada’s corporate sustainability leaders, just 13 of this year’s Best 50 companies have made net-zero commitments. However, 25 (50%) achieved year-over-year emissions-intensity reductions of at least 7.6%, the rough global benchmark to be aligned with a net-zero trajectory.” Additionally, the magazine found that among Best 50 companies, 9% of Board members are non-white.

    “We are pleased to have made the top 50 Best Corporate Citizens list,” said Tracy Robinson, President and CEO of CN, which has earned a place on the list for 14 consecutive years. “CN believes in ‘Delivering Responsibly.’ This means moving our customers’ goods safely and efficiently, ensuring we deliver in an environmentally responsible manner; attracting, developing, and retaining top diverse talent; helping to make the communities we serve safer and stronger; and adhering to the highest ethical standards. This is the way we approach our job.”

    “CP is proud to be recognized by Corporate Knights as one of Canada’s ‘Best 50 Corporate Citizens’ for 2022 as an industry leader in sustainability,” CP reported via Twitter.

    (Photograph Courtesy of CSX)

    More than 150 employees of CSX and its subsidiary Quality Carriers assembled 5,000 care packages for U.S. military service members, who have been mobilized to Eastern Europe in response to the Ukraine conflict.

    The effort was part of “Pride in Service,” CSX’s ongoing community investment initiative, which it says is “focused on delivering resources and support to military members and their families, when and where they need it.” Care packages are slated to arrive in time for “Christmas in July, a military tradition that started in 1944 as a way for Americans to support deployed service members outside of the crowded shipping timeframe surrounding year-end holidays,” the railroad reported.

    Care package assembly took place at the Tampa, Fla. headquarters of Quality Carriers, a provider of bulk liquid chemicals truck transportation. Employees and their family members filled packages with snacks, games, supplies, and handwritten letters from Americans across the country.

    Assembly days like this “are a big part of Operation Gratitude[’s] overarching mission to express deep appreciation for those who step forward to serve and sacrifice on behalf of the American people,” CSX said.

    The Cuyahoga Heights Fire Department in Ohio recently received a $1,000 donation from Newburgh & South Shore Railroad (NSR) in honor of Charter Steel, the railroad’s 2021 safe shipper award winner.

    NSR presented a $1,000 donation to the Cuyahoga Heights Fire Department at a recent ceremony honoring Charter Steel of Cleveland, Ohio, NSR’s recipient of the 2021 OmniTRAX Safe Shipper Award. The award recognizes “companies that model exemplary shipping safety by shipping or receiving loaded cars with no accidental releases during the previous year,” according to Denver, Colo.-based OmniTRAX, the transportation affiliate of The Broe Group. Charter Steel also received the award in 2020.

    “Community safety is a shared effort with our partners, and we applaud the shared commitment to safety modeled by OmniTRAX and Charter Steel,” Cuyahoga Heights Fire Department Fire Chief Michael Suhy said. “We are also grateful for this donation to help maintain community safety throughout Cuyahoga Heights.”

    “OmniTRAX network-wide safety milestones reflect a relentless team commitment and true collaboration with our shipping partners,” OmniTRAX Senior Vice President of Operations John Bradley said. “We are proud to recognize a two-time NSR award winner that models a consistent commitment to safety.”