Feds approve first major railroad merger in two decades

CHICAGO (CBS) -- Federal regulators have approved the first major railroad merger in more than 20 years, signing off on Canadian Pacific's $31 billion acquisition of Kansas City Southern.

While they are the two smallest railroads in the U.S., the merger creates the only railroad linking Canada, Mexico and the United States.

The U.S. Surface Transportation Board said the merger will improve the flow of goods – from Midwest grain to cars – between the U.S. and Mexico.

The Associated Press reports the merger will create 800 new jobs in the U.S.

Regulators said the only major impact of the deal would be more noise and train traffic in places like Chicago, potentially delaying regular commuter traffic on Metra lines.

There was also concern that, in small towns, more and longer trains could block access points for emergency vehicles.

"As communities, we're left kind of holding the bag a bit with trying to deal with the onslaught of traffic, and the noise, and the things that come with it; and that's what's ahead of them. So I feel for them," said Karen Darch, village president in northwest suburban Barrington.

Critics of the merger include Massachusetts U.S. Sen. Elizabeth Warren, who said, "allowing this merger … to proceed would reduce competition in an already highly consolidated market and could cause increased shipping costs."

The proposed merger could result in significant job losses and service disruptions that negatively impact American supply chains.

This all comes as the industry is under pressure to improve safety in the wake of last month's fiery Norfolk Southern derailment in Ohio, which prompted evacuations and created lingering health concerns following the release of toxic chemicals from tankers involved in the derailment.