[Federal Register Volume 66, Number 237 (Monday, December 10, 2001)]
[Notices]
[Pages 63741-63742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-30467]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Docket No. 42052]


Union Pacific Railroad Company--Petition for Declaratory Order--
Unilaterally Imposed Interchange Charges

AGENCY: Surface Transportation Board, DOT.

ACTION: Notice of further proceedings.

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SUMMARY: This proceeding was instituted by the Surface Transportation 
Board (Board) in response to a request for a declaratory order 
concerning ways in which rail carriers deal with interchange delays. 
However, because issues regarding interchange delays are usually 
addressed under the framework of the industry-wide Car Service and Car 
Hire Agreement (CS/CH Agreement) and Code of Car Service Rules/Code of 
Car Hire Rules (CS/CH Rules) administered by the Association of 
American Railroads (AAR), we are requesting that, before we take 
action, AAR convene a meeting with railroads, shippers, and other 
involved parties to discuss ways to address issues concerning delays in 
the interchange of railroad cars between railroads, and to develop 
proposals for addressing incidences of traffic delays associated with 
such interchange. We are further requesting that AAR file a report with 
the Board, describing the progress made at the meeting(s) and 
recommending how best to proceed to resolve these issues.

DATES: We request that AAR convene a meeting with railroads, shippers 
and other involved parties, as described herein, by February 8, 2002. 
Additional meetings may be held as determined by AAR and the involved 
parties. AAR's report, as described herein, is due by March 11, 2002.

ADDRESSES: The original and 10 copies of AAR's report, referring to STB 
Docket No. 42052, should be sent to: Surface Transportation Board, 
Office of the Secretary, Case Control Unit, 1925 K Street, NW., 
Washington, DC 20423-0001, ATTN: STB Docket No. 42052. AAR should also 
make a copy of its report available to all participants in the meeting, 
and any other involved parties upon request.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for 
the hearing impaired: 1-800-877-8339.]

SUPPLEMENTARY INFORMATION: By notice served and published June 13, 
2000, 65 FR 37205, in response to a petition filed by Union Pacific 
Railroad Company (UP), a declaratory order proceeding was instituted by 
the Board under 5 U.S.C. 554(e) to address questions concerning the 
right of a rail carrier to impose penalty charges unilaterally against 
other rail carriers for delays in accepting cars in interchange. 
Comments were requested from interested parties.
    As indicated in our notice, the controversy centers on ``tariff'' 
provisions issued by respondents Indiana Harbor Belt Railroad Company 
(Indiana Harbor Belt), Iowa Interstate Railroad, Ltd., and City of 
Tacoma, Tacoma Public Utilities, d/b/a Tacoma Rail and Tacoma Beltline 
Railroad, pursuant to which penalty charges would be imposed when cars 
are not pulled from interchange within specified time limits. UP 
asserts that such interchange issues are subject to the CS/CH Agreement 
and CS/CH Rules, unless the rail carriers enter into alternative 
agreements. UP seeks a declaration from the Board that, under 49 U.S.C. 
11121, a rail carrier may not unilaterally impose such charges on 
another carrier for delayed interchange of cars, either by ``tariff'' 
or otherwise, and that interchange-related charges imposed by one rail 
carrier on another must be either permitted by agreement of the 
carriers involved or specifically authorized by the Board.
    Comments were received from Class I railroads, short line 
railroads, shippers, and labor interests.\1\ A substantial number of 
these comments focused on the effect that a declaratory order might 
have on switching services in the vicinity of Chicago, IL. We have 
considered all of the comments carefully, and we find that there are 
significant issues to be resolved, which could have an impact on the 
important matter of fluidity throughout the rail system. Because we 
believe that resolution of these issues can best be achieved through 
the cooperation of all segments of the railroad industry, rather than a 
decision by the Board on a particular controversy, we are deferring 
final Board action to provide an opportunity for such private-sector 
discussions.
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    \1\ Indiana Harbor Belt has moved to strike portions of UP's 
reply, tendering, in the alternative, a surreply to what it asserts 
are new arguments presented in that reply. UP filed a reply to the 
motion to strike and, in the alternative, a surreply. Given our 
action here, we do not find good cause to strike the challenged 
material, nor will any party be prejudiced by leaving it (and UP's 
and Indiana Harbor Belt's surreplies) in the record.
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Discussion and Conclusions

    Interchange of traffic among railroads is a fundamental operational 
component of the national railroad network. It is important that 
interchange be accomplished in an economical and efficient manner. The 
interchange of traffic is typically a straightforward and reasonably 
uniform process in which all carriers participate for the benefit of 
themselves and the shipping public.
    Sometimes parties differ as to how such interchange can be 
accomplished to best meet the needs of all concerned. We can resolve 
these sorts of disputes, if the parties cannot do so themselves, and we 
will resolve the issues raised here if it is necessary for us to do so. 
However, the national railroad system functions best on the basis of 
good faith cooperation among all railroads, both

[[Page 63742]]

large and small. If we were to rule against UP and find that carriers 
are not prohibited from unilaterally imposing interchange charges, the 
result could be a variety of charges, imposed pursuant to the actions 
of one carrier and the responses of another, that would not be 
conducive to the cooperation necessary for a seamless, efficient 
national rail network. The U.S. Department of Transportation filed 
comments suggesting that we urge the rail industry to meet and attempt 
to negotiate an effective and equitable resolution of these issues. We 
agree that broader industry discussion of those issues would be 
preferable. Therefore, in the spirit of cooperation, before we 
undertake to resolve this matter, we will first give those directly 
affected by the issues UP has raised, both in the Chicago area and 
elsewhere, an opportunity to establish workable solutions.
    The Board has successfully encouraged private-sector negotiation to 
resolve other difficult issues. For example, during implementation of 
the merger between UP and Southern Pacific Transportation Company and 
its affiliates,\2\ UP was directed to convene meetings with shippers, 
involved railroads, and other interested parties to address concerns 
pertaining to the Houston Terminal, leading to a coordinated plan for 
improving the utilization of Houston area infrastructure.\3\ Then, 
during our review of the division of Conrail's assets, we directed CSX 
and Norfolk Southern to convene meetings with shippers, involved 
railroads, and other interested parties to discuss opportunities to 
improve the Buffalo, NY area rail infrastructure, which resulted in 
service improvements and better communication.\4\ Also, in an effort to 
address congestion in the Chicago, IL area, the individual railroads 
and AAR, at the urging of the Board and other interested parties, have 
been working together to improve rail operations in Chicago through the 
development of the Chicago Service Plan and the establishment of the 
Chicago Planning Group and the Chicago Transportation Coordination 
Office. Most recently, we directed railroads to negotiate, in 
accordance with a 1986 agreement, concerning disputes with private tank 
car owners about certain charges being levied by The Burlington 
Northern and Santa Fe Railway Company and UP.\5\
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    \2\ The merger was approved by the Board in Union Pacific/
Southern Pacific Merger, 1 S.T.B. 233 (1996), aff'd, Western Coal 
Traffic League v. STB, 169 F.3d 775 (D.C. Cir. 1999).
    \3\ Joint Petition for Service Order, STB Service Order No. 1518 
et al., (STB served Feb. 25, 1998), slip op. at 5.
    \4\ CSX Corporation and CSX Transportation, Inc., Norfolk 
Southern Corporation and Norfolk Southern Railway Company--Control 
and Operating Leases/Agreements--Conrail Inc. and Consolidated Rail 
Corporation (Buffalo Area Infrastructure), STB Finance Docket No. 
33388 (Sub-No. 93) (STB served June 9, 2000).
    \5\ North America Freight Car Association--Protest and Petition 
for Investigation--Tariff Publications of The Burlington Northern 
and Santa Fe Railway Company, et al., STB Docket No. 42060, et al. 
(STB served Oct. 18, 2001).
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    As signatories to the CS/CH Agreement, operating railroads, 
including Class I, short line, regional and terminal railroads, have 
agreed to use the CS/CH Rules as a means both to coordinate their 
operations and to resolve areas of dispute that arise. Accordingly, we 
are requesting AAR to convene a meeting with shippers, railroads, and 
other involved parties to discuss more fully the available means of 
improving coordination of interchange of traffic in Chicago and 
elsewhere, and file a report with the Board. The report should describe 
the results of the meeting and should present suggestions for the best 
ways to address issues concerning delays in interchange, including the 
appropriate use of the CS/CH Rules.\6\ AAR should explain if changes 
are needed to the terms and application of the CS/CH Rules, why they 
may be needed, how these changes may most effectively be implemented, 
and the possible timetable for implementing such changes. Once the 
report is filed, we will determine what further action is appropriate.
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    \6\ The CS/CH Rules include arbitration as a means of resolving 
disputes between participating carriers.
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    We encourage AAR to reach out to all involved parties \7\ and to 
work with them to achieve the common goal of improving interchange of 
cars in general and reducing the opportunity for delay of rail traffic 
in interchange, not only in the Chicago area, but across the Nation as 
well.
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    \7\ Participation in the meetings should be open to large and 
small railroads, shippers and other involved parties.
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    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. Indiana Harbor Belt's motion to strike is denied. The surreplies 
of Indiana Harbor Belt and UP are accepted.
    2. AAR is requested to convene a meeting with railroads, shippers, 
and other involved parties to discuss issues concerning delays in the 
interchange of railroad cars, consistent with this decision, by 
February 8, 2002.
    3. AAR should provide a report to the Board by March 11, 2001. AAR 
should also make a copy of its initial report available to all meeting 
participants, and any other involved parties upon request.
    4. This decision is effective on December 10, 2001.

    Decided: December 3, 2001.

    By the Board, Chairman Morgan, Vice Chairman Clyburn, and 
Commissioner Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 01-30467 Filed 12-7-01; 8:45 am]
BILLING CODE 4915-00-P