Posts Tagged ‘U.S. Surface Transportation Board’

Class 1 Employment Up in December

February 9, 2023

Class 1 railroad employment rose in December, the U.S. Surface Transportation Board reported this week.

In mid-December the carriers employed 119,349 people, a 0.34 percent increase compared to November 2022 and a 3.88 percent increase compared with December 2021.

STB figures showed five of six employment categories posting gains between November and December 2022.

This included transportation (other than train and engine), up 0.88 percent to 4,821 workers; transportation (train and engine), up 0.49 percent to 50,178; maintenance of way and structures, up 0.3 percent to 28,515; professional and administrative, up 0.3 percent to 10,028; and maintenance of equipment and stores, up 0.2 percent to 17,810.

The only loss was in the category of executives, officials and staff assistants, which declined 0.41 percent to 7,997 people.

On a year-over-year comparison, executives, officials and staff assistants rose 6.78 percent.

Other categories included transportation (train and engine), up 5.39 percent; maintenance of equipment and stores, up 3 percent; transportation (other than train and engine), up 2.71 percent; maintenance of way and structures, up 2.64 percent; and professional and administrative, up 0.07 percent.

Carries Continue to Dispute STB Small Rates Rule

February 7, 2023

Four Class 1 railroads are continuing their efforts to get the U.S. Surface Transportation Board to modify the terms of an arbitration program regulators established to settle small rate cases.

CSX, Norfolk Southern, Union Pacific and the U.S. companies owned by Canadian National asked the STB to allow a carrier to file its opt-in notice of the program at any time.

The arbitration program being established by the STB requires all Class 1 carriers to agree to participate or the program won’t be in effect.

Regulators have given the carriers until Feb. 23 to agree or disagree to join. The carriers have been calling for additional time before they must make their decision.

The same carriers had last December asked the STB to stay implementation of the arbitration program but regulators rejected that request without prejudice on Jan. 24.

The STB established two rules regarding small rate cases in a rule making proceeding that was finished late last year.

Aside from the arbitration program, the STB established a final offer rate review mechanism for settling small rate disputes.

At the time the STB called the new rules an effort to streamline the process for shippers and railroads to resolve small rate disputes.

If all seven Class 1 railroads agree to join the arbitration program they will be exempt from the final offer rate review process for five years.

The carriers petitioning the STB in the latest filing contend the STB’s decision to set an opt-in deadline is unlawful because it fails “to give notice of its intent to impose this draconian measure; departed from contrary agency precedent without explanation; failed to provide legally sufficient justification for its action; and contradicted its own reasoning in the Final Rule that carriers needed to know the contents of the arbitration program before making a five-year commitment to it.”

AAR Takes STB Small Rate Dispute Rule to Court

February 1, 2023

The Association of American Railroads is challenging in court a recent U.S. Surface Transportation Board ruling on small rate cases.

The trade association asked the U.S. Court of Appeals for the District of Columbia to review the rule which requires all seven Class 1 railroads to agree to an arbitration process before it can become effective.

The STB recently turned down a request by four Class 1 carriers to stay implementation of the rule.

STB Won’t Reconsider Rate Reasonable Rule

January 30, 2023

The U.S. Surface Transportation Board last week denied two petitions seeking reconsideration of agency rules that establish a streamlined approach for pleading market dominance in rate reasonableness proceedings.

STB adopted the rules more than two years ago.

At the time, the STB said, “if demonstrated by a complainant, [it] would constitute a prima facie showing of market dominance.”

The factors the STB said it would consider in such cases include the movement has a revenue-to-variable cost ratio of 180 percent or greater; the movement would exceed 500 highway miles between origin and destination; there is no intramodal competition from other railroads; there is no barge competition; there is no pipeline competition; the complainant has used truck for 10 percent or less of its volume (by tonnage) subject to the rate at issue over a five-year period; the complainant has no practical build-out alternative due to physical, regulatory, financial, or other issues (or combination of issues).

The petitions for reconsideration were filed by several trade organizations representing railroad shippers.

Their petition claimed the STB “committed material error regarding four aspects of its final rule adopting the streamlined approach.

Also seeking reconsideration was the Association of American Railroads.

In denying the petitions for reconsideration, the STB said the petitioners had “failed to demonstrate material error, but instead merely disagree with the Board’s decision on these issues.”

STB Won’t Stay Rate Arbitration Proposal

January 27, 2023

The U.S. Surface Transportation Board has denied a request by four Class 1 railroads to stay implementation of an agency rule issued last month establishing an arbitration mechanism to settle small rate disputes.

The arbitration program would only become effective if all Class 1 railroads agreed to participate.

CSX, Norfolk Southern, Union Pacific, and the U.S. operating subsidiaries of Canadian National asked the board in late December to delay the deadline for Class 1 railroads to agree or disagree to participate in the arbitration program.

The rule establishing the arbitration program is to take effect on Feb. 3.

The STB has described the arbitration program as one of two approaches it is taking to create new “rate reasonableness” proceedings that regulators contend will streamline the process for shippers and railroads to resolve smaller rate disputes.

The STB gave Class 1 railroads 50 days from the publication of the rule in the Federal Register to commit to participating in the arbitration program for five years. The rule was published in early January.

If all seven Class 1 carriers agree to that, they will be exempt from the Final Offer Rate Review rate challenge process.

Smaller rates are defined by the STB as rate disputes worth up to $4 million in relief over two years.

Under the new FORR procedure, if regulators find a rate to be unreasonable, they “will decide the rate by selecting either the complainant’s or the defendant’s final offer, subject to an expedited procedural schedule that adheres to firm deadlines.

Under the arbitration program, Class I rail carriers would commit for a period of five years to arbitrate rate disputes, under a similarly expedited schedule.

Hedlund Named STB Vice Chair

January 11, 2023

Surface Transportation Board member Karen Hedlund has been named as the agency’s vice chairman.

Hedlund as been a member of the board since January 2022. As vice chairman she will replace Michelle Schultz, who continues to serve as a board member.

The vice chairman role rotates among STB members on an annual basis.

Before being appointed to the STB, Hedlund served as chief counsel of the Federal Highway Administration from 2009 to 2010, and as chief counsel and deputy administrator of the Federal Railroad Administration from 2010 to 2014.

CSX, CN Seek to Block New STB Rate Rule

January 11, 2023

CSX, Canadian National and Union Pacific have gone to court to try to block implementation of a U.S. Surface Transportation Board rule seeking to streamline the settlement of small rate disputes with shippers.

CSX filed suit in the U.S. Court of Appeals for the 11th Circuit challenging an arbitration process that the STB plans to launch as part of the new rules, which the agency said are designed to make it easier, faster and less expensive for shippers to initiate cases seeking up to $4 million in relief over two years.

The rules were adopted in December as part of a new process called Final Offer Rate Review. The rule drew applause from shippers but was attacked by the Association of American Railroads as unworkable.

UP filed a similar lawsuit in the appeals court for the Eighth Circuit seeking to block the STB rule. CN’s challenge of the rule was filed in the Seventh Circuit appeals court by its U.S. subsidiaries, Illinois Central and Grand Trunk Western.

A sticking point in the small rate case rules is the arbitration component. STB wants all Class 1 railroads to agree to binding arbitration while the railroads have called for voluntary arbitration.

The AAR has argued that the Final Offer Rate Review process exceeds the agency’s legal regulatory authority.

AAR s position is that the effect of the new rule is that regulators will choose and impose the rate proposed by the shipper or the rate offered by the railroad.

The trade association also has been critical of the requirement that all Class 1 railroads must agree to participate.

The STB for its part has sought to frame the new rule as striking a balance between competing interests.

Ohio Gets Support in Rail Court Case

January 8, 2023

Nine states and the District of Columbia are supporting a case brought by the State of Ohio before the U.S. Supreme Court regarding state authority to regulate railroad grade crossings.

Ohio appealed to the high court a lower court ruling that only the U.S. Surface Transportation Board has authority to regular railroad activities at grade crossings.

The case stemmed from blocked grade crossings by CSX trains. Ohio argues in the case that CSX has frequently blocked crossings and thus impeded public safety.

Filing a brief in support of Ohio’s position was a brief submitted by Indiana Attorney General Todd Rokita that argued that no federal law or regulation addresses blocked crossings. Therefore state and local intervention is needed because railroads often become roadblocks to life-saving emergency care.

Briefs filed in the case cited Federal Railroad Administration reports of 25,374 blocked crossings from December 2019 to September 2021.

However, the agency only investigated 906 of them because FRA jurisdiction is limited.

Ohio and other states want the high court to rule on the question of whether, as the lower court ruled, only the STB has legal authority to regulate grade crossings.

In making their case, the states said the STB usually does not address blocked grade crossing cases and that case law is unclear as to who at the federal level has the ability to regulate blocked crossings.

Typically, states have sought to regulate grade crossings by approving laws or regulations saying how long a train may block a crossing.

A case similar to the one involving Ohio and CSX has played out in court in Kansas involving BNSF. That case arose in Chase County after a BNSF train blocked a road for more than four hours.

In dismissing the case, a Kansas appeals court cited the Ohio case ruling that only the STB can regulate railroad activities at grade crossings.

Other groups that have filed briefs in support of Ohio include the Ohio Prosecuting Attorneys Association and a joint filing from the Brotherhood of Locomotive Engineers and Trainmen, the International Association of Sheet Metal, Air, Rail, and Transportation Workers, and the Academy of Rail Labor Attorneys. 

Class I Employment Rose in November

December 28, 2022

U.S. Class 1 railroad employment edged up in mid-November by 0.62 percent the Surface Transportation Board reported this week.

The railroads employed 118,944, an increase of 4.38 percent when compared to last year during the same period.

Five of six employment categories posted employment gains between October and November. They were: transportation (other than train and engine), up 1.34 percent to 4,779 employees; professional and administrative, up 1.11 percent to 9,998; executives, officials and staff assistants, up 0.96 percent to 8,030; maintenance of equipment and stores, up 0.77 percent to 17,774; and transportation (train and engine), up 0.74 percent to 49,934.

Losing ground was maintenance of way and structures, which fell 0.05 percent to 28,429 employees.

On a year-over-year comparison, all categories saw gains. This included executives, officials and staff assistants, up 10.29 percent; transportation (T&E), up 6.29 percent; maintenance of equipment and stores, up 3.15 percent; transportation (other than T&E), up 2.8 percent; professional and administrative, up 2.47 percent; and maintenance of way and structures, up 1.31 percent

STB Issues Small Rate Dispute Rules

December 21, 2022

The U.S Surface Transportation Board adopted this week two rules pertaining to rate reasonableness rate case procedures.

The agency said the rules are designed to provide two streamlined approaches for shippers and railroads to resolve smaller rate disputes.

One procedure is a voluntary arbitration program while the other is a new process for rate challenges known as “final offer rate review.”

The STB said both rules are designed to “substantially improve shippers’ access to rate reasonableness reviews for smaller rate disputes.”

Through the new rate reasonableness procedures, the voluntary arbitration program will take effect only if all seven Class Is commit to participating in the program for five years and do so within 50 days of the date of publication of the final rule in the Federal Register.

The STB said if all carriers do so, they will be exempt from the FORR procedure.

When the rulemaking process began in 2019, five Class I carriers filed a joint petition urging the board to exempt them from the FORR procedure.

In return, the Class Is agreed to resolve rate challenges through binding arbitration, a methodology in which the carriers had previously refused to participate for many years.

In November 2021, the board advanced rulemakings in both FORR and the establishment of a voluntary arbitration program. The most recent decision is the culmination of those actions.

Both review mechanisms are limited to rate disputes worth up to $4 million in relief over two years. Under the new FORR procedure, if the board finds a rate to be unreasonable, it will decide the rate by selecting either the complainant’s or the defendant’s final offer, subject to an expedited procedural schedule that adheres to firm deadlines.