Posts Tagged ‘U.S. Surface Transportation Board’

STB CSX-Pan Am Merger Hearings to be Online

January 8, 2022

The U.S. Surface Transportation Board this week said that public hearings regarding CSX plans to acquire Pan Am Systems will be conducted online.

The hearings will be conducted via Zoom and will begin at 9:30 a.m. on Jan. 13. Additional time has been allotted on Jan. 14 to accommodate all speakers, the STB said in a news release.

CSX wants to acquire the 1,200-mile Pan Am system, thus extending the Class 1 carrier’s network into areas of Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.

NS Talks With STB About Reciprocal Switching

January 7, 2022

Norfolk Southern has responded to a series of questions posed by the U.S. Surface Transportation Board regarding reciprocal switching regulations that the Board is considering adopting.

The Class 1 carrier did not outright oppose such a regulation but raised a number of concerns about it, including the adverse effects it could have on operations and differential pricing.

Reciprocal switching would mandate that a railroad with sole physical access to a particular shipper allow another carrier to switch the shipper’s cars to a junction point with the competing railroad.

The practice, which has been common in Canada for several years, has been supported by many shippers as a way to increase competitiveness.

Railway Age reported that NS and STB officials met in December to discuss proposed reciprocal switching regulations.

Similar meetings have been held in the past year between STB officials and those in various shipper organizations.

During their meeting with the STB, NS executives said reciprocal switching might be justified if a railroad was engaging in anticompetitive conduct and refusing to provide customers an efficient route for their freight.

However, NS said that remedies to such scenarios already exist under existing law and the STB already has mechanisms in place “to test the lawfulness of rates.”

It also said instituting reciprocal switching might serve the public interest in a few isolated cases.

Further information about the meeting and the position  that NS adopted in the article at https://www.railwayage.com/regulatory/ns-stb-talk-reciprocal-switching/

Hedlund Sworn in to STB Seat

January 4, 2022

Karen J. Hedlund has taken her seat on the U.S. Surface Transportation Board, which gives the agency its full five members.

Hedlund, a Democrat, succeeds Ann Begeman, a Republican whose term and holdover status had both expired.

Hedlund, whose term runs through Dec. 31, 2025, has held a number of administrative positions with federal transportation agencies, including serving as chief counsel and deputy administrator of the Federal Railroad Administration (2010-2014), and chief counsel of the Federal Highway Administration (2009-2010).

Most recently Hedlund has worked as a consultant for governmental agencies and private investors on passenger rail and transportation-oriented projects.

STB Denies Bid to Delay Arbitration Rulemaking

December 30, 2021

The U.S. Surface Transportation Board said this week it will continue a proceeding focused on using voluntary arbitration to resolve small rate cases.

The decision was made in denying a request from various shipper trade groups to delay the rule-making process in the case.

The shipper groups sought to delay the rule-making process until Class 1 railroads “state whether they would participate in the proposed program if arbitrators are permitted to consider revenue adequacy, as has been proposed by the Board.”

The STB said what the shippers are seeking is premature because it seeks to require rail carriers to pledge to participate in the proposed arbitration program based solely on the single issue of revenue adequacy before the record has been fully developed.

The rulemaking process regarding voluntary arbitration was launched in 2020 upon the request of five Class 1 railroads: Canadian National, CSX, Kansas City Southern, Norfolk Southern and Union Pacific.

The shippers groups seeking to delay the rule-making process included the American Chemistry Council, Corn Refiners Association, National Industrial Transportation League, The Chlorine Institute, and The Fertilizer Institute.

The STB said it will continue seeking public comment on the proposed rule through Jan. 14, 2022. It expects railroads to state their position on the revenue adequacy issue in their comments to the Board.

Reply comments will be accepted through April 15, 2022, while ex parte communications regarding the proposed rule will be are allowed until March 28, 2022.

STB Sets Hearings on Reciprocal Switching

December 29, 2021

The U.S. Surface Transportation Board will hold public hearings on March 15-16 on proposed reciprocal switching regulations.

The hearings will be held in Washington at STB headquarters and streamed live online on the agency’s website.

The proposed regulations were first announced in July 2016 and would require railroads to establish switching arrangements by competing companies for certain shippers.

Those competing companies do not physically reach a shipper(s) and would be required to pay the host railroad a switching fee.

The proposed regulations have already received extensive comments from shippers, railroads and others but the STB said in a news release that “there have been significant changes in and affecting the freight rail industry” and therefore hearings are being held.

Those wishing to address the Board must notify it by Jan. 27, 2022. Written comments should be submitted by Feb. 14, 2022.

More information about the hearings can be found at https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1640705404954/50995.pdf

Watco Gets STB OK to Acquire Lines From CN

December 21, 2021

Short line operator Watco has gained approval by the U.S. Surface Transportation Board to acquire hundreds of miles of former Wisconsin Central track in Ontario, Wisconsin and Michigan.

Watco plans to incorporate the track into its Grand Elk Railroad and a new railroad to be named Fox Valley & Lake Superior.

The track, which is being purchased from Canadian National, includes the former Algoma Central in Ontario and various branch lines in Michigan and Wisconsin once operated by WC.

Watco has indicated that it already has equipment and personnel in place to begin operating the routes once the acquisition gained regulatory approval.

The STB earlier this year had delayed the transaction after hearing concerns from some shippers. Those concerns have since been addressed, Watco officials said.

 “The Board received numerous comments supporting the transactions and numerous comments opposing it,” the STB wrote in a decision allowing the sale to go forth. “After careful consideration of all comments received, the Board finds that the issues raised do not demonstrate regulation is necessary to carry out the rail transportation policy and that it is appropriate to allow Watco to proceed with the exemption process.”

Hedlund Confirmed for STB Seat

December 17, 2021

The U.S. Senate this week confirmed Karen J. Hedlund to a seat on the five-member U.S. Surface Transportation Board.

Hedlund, a Democrat, will replace Republican Ann D. Begeman, who was serving on the Board in holdover status after her term expired.

Nominated by President Joseph Biden last April, Hedlund’s nomination had stalled due to the objection of Senator Mike Lee (R-Utah). 

There had been speculation Lee wanted to keep Hudlund off the Board until it acted on a petition to create the 85-mile Uinta Basin Railway, which was to carry crude oil from the Uinta Basin to a connection with Union Pacific.

The STB approved the Unita Basin project this week and the Senate subsequently approved Hedlund’s nomination for unanimous consent.

Railway Age columnit Frank Wilner reported that Lee may have worried that Hedlund would, like STB Chairman Martin J. Oberman, have concerns about the Unita Basin project and might vote against it.

In other Senate action, Senator Rick Scott (R-Florida) objected to confirmation of Amitabha Bose to be Federal Railroad Administrator.

Bose is currently serving as Deputy Administrator and will continue in that role indefinitely.

NS Details Service Issues in Letter to STB

December 14, 2021

Norfolk Southern President Alan H. Shaw acknowledged in a letter to the U.S. Surface Transportation Board that its service quality is not where it should be.

The letter, dated Dec. 10, outlined the steps the Class 1 carrier is taking to improve its performance.

Shaw’s latter came in response to an inquiry from STB Chairman Martin Oberman who had written in November to then NS President James Squires to ask the railroad to address the deterioration of “key operating metrics” and an increasing number of shipper complaints about NS service.

Shaw blamed high workers attrition and a tight labor market for the service issues, noting that the company has been actively seeking to hire new conductors.

The service issues have been particularly acute in the Cincinnati-Chattanooga, Tennessee, corridor; in Birmingham, Alabama; and on the former Southern Tier line east of Buffalo, New York.

NS has taken such steps as redeploying personnel, reworking crew districts on the former Cincinnati, New Orleans & Texas Pacific line, and taking advantage of reduced activity during the Thanksgiving holiday period to alleviate yard congestion in Birmingham and Chattanooga.

However, Shaw said similar progress has remained elusive for the Southern Tier.

As for hiring new conductors, Shaw said that through Dec. 6 NS had 285 employees in conductor training with another 939 prospective employees in the pre-employment process.

The company has offered economic incentives to prospective new hires and existing workers to encourage them to continue working for NS.

Shaw said it will take time to get its new hires into position and to address the service issues it has experienced.

The letter from Shaw to the STB can be viewed at https://www.stb.gov/wp-content/uploads/NS-Response-Letter-to-Chairman-Oberman-Regarding-Service-Issues_December-10-2021.pdf

CP-KCS Deal to Close Today, STB Sets Hearing for CSX-Pan Merger

December 14, 2021

Canadian Pacific is expected to assume ownership of Kansas City Southern today (Dec. 14, 2021).

The $31 billion acquisition was approved by shareholders of both companies last year, but a merger of the two companies is pending review by the U.S. Surface Transportation Board.

KCS will continue to operate as an independent company during the review period and be placed in a blind trust until the STB rules in what is expected to be the fourth quarter of 2022.

During this period, management of KCS is expected to remain the same.

In an unrelated development involving Class 1 railroad mergers, the STB has set hearing dates of Jan. 13-14, 2022, for the proposed merger of CSX and New England regional railroad Pan Am Railways.

The hearing will be held online on Jan. 13 with time reserved for the following day if needed.

Those wishing to address the Board must file a notice of intent to participate by Dec. 20.
The STB also said last week that it will not require an environmental and historic review in the CSX acquisition of Pan Am.

STB Modifies Emergency Trackage Rights Rule

December 4, 2021

The U.S. Surface Transportation Board this week approved a final rule regarding a new class exemption for emergency temporary trackage rights.

The new rule ends a 30-day notice period in certain circumstances which STB officials said will allow for faster authorization of trackage rights in response to an unforeseen event that closes a rail route.

The rule was sought by the Association of American Railroads, which wanted to end the 30-day waiver in favor of a five-day process.