Dispute Leaves Michigan Shippers Without Rail Service; STB Asked to Break the Deadlock

A dispute between the Grand Elk Railroad and CSX has left a half-dozen Michigan shippers without rail service for the past six weeks.

STBThe two railroads are arguing over a 3-mile stretch of track in Grand Rapids, Michigan, owned by CSX and over which Norfolk Southern had trackage rights.

CSX last month said that Grand Elk can not use the track because the NS trackage rights were not conveyed to the Grand Elk when it leased an NS line in 2008.

Grand Elk, which is owned by Watco, has asked the U.S. Surface Transportation Board to rule on the matter, asking the board to render a decision as soon as possible.

The short line said the trackage rights were “inadvertently” left out of Watco’s agreement with NS.

For its part, CSX has asked the STB to deny Grand Elk’s petition and argues that the short line has been operating illegally on the track in dispute.

Grand Elk, which began operating the former Conrail line in 2009, contends that it assumed that trackage rights had been assigned to it even if they were not specifically stated in the lease agreement.

In a filing before the STB, Grand Elk said if the trackage rights had been excluded, it would make no sense to sign the lease agreement.

CSX told the STB that Grand Elk had six opportunities to include the disputed trackage, but failed to do so when it negotiated the lease agreement with NS.

“CSX believes that [Grand Elk] has been operating surreptitiously over the line to mislead shippers about the product it is selling,” a CSX filing said.

It said Grand Elk’s failure to obtain STB authorization for more than seven years should not be viewed as an oversight but part of an illegal operation on CSX track.

CSX also contends that all previous trackage rights agreements expired in 2014. Grand Elk has sought to circumvent this by asking the STB to make the trackage rights retroactive to 2009.

The dispute dates to an effort in the 1980s by the city of Grand Rapids and the Michigan Department of Transportation to reduce the number of railroad lines in Grand Rapids in order to improve traffic safety.

The Chesapeake & Ohio gave Conrail trackage rights so it could abandon its right-of-way.

The 122-mile Conrail route in question extends from Grand Rapids to Elkhart, Indiana, and was conveyed to NS as part of the 1999 Conrail breakup.

Supporting the Grand Elk are shippers, city government and state elected officials.

One such shipper is Brink Farms, which in 2015 built a $2 million transload facility in Grand Rapids that has sat idle due to the trackage rights dispute.

Brink, which provides bulk transportation service for farmers, including feed, fertilizer, and grain, has another Grand Rapids facility that is not affected by the dispute.

Filings in the case indicate that CSX has said it will provide switching at the new Brink facility for $300 per car move, whereas Grand Elk would charge $105.

Brink said the CSX charges make it cost-prohibitive to use its new transload site. Brink Farms ships about 1,000 cars per year.

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