[Federal Register Volume 85, Number 42 (Tuesday, March 3, 2020)]
[Notices]
[Pages 12647-12648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-04275]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36346]


Wisconsin Central Ltd.--Operation Exemption--Hallett Dock No. 5 
In Duluth, Minn.

    On November 8, 2019, Wisconsin Central Ltd. (WCL) \1\ filed a 
petition seeking an exemption under 49 U.S.C. 10502 from the prior 
approval requirements of 49 U.S.C. 10901 to operate a rail/water dock 
facility, known as Hallett Dock No. 5 (the Dock), in Duluth, Minn., 
after WCL acquires the Dock from its current noncarrier owner, Hallett 
Dock Company (Hallett). (See WCL Exemption Pet. 1.) Concurrently, WCL 
filed a petition for establishing a procedural schedule that included a 
request for expedited consideration of its exemption petition. (See WCL 
Scheduling Pet. 1-2.)
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    \1\ WCL is a wholly owned, indirect subsidiary of Canadian 
National Railway Company. (See WCL Exemption Pet. 2 (citing Can. 
Nat'l Ry.--Control--Wis. Cent. Transp. Corp., 5 S.T.B. 890 (2001)).)
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    In a decision served on November 22, 2019, the Board instituted a 
proceeding under 49 U.S.C. 10502(b). No comments opposing WCL's 
petitions were filed.\2\ For the reasons discussed below, the Board 
will grant WCL's exemption petition for authority to operate over the 
Dock trackage as described below.
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    \2\ WCL initially requested a procedural schedule with an 
effective date for the exemption of March 27, 2020, to permit 
implementation of the transaction in time for the start of the Lake 
Superior shipping season in April. (See WCL Scheduling Pet. 2-3.) On 
December 17, 2019, WCL filed a request for the Board to further 
expedite its decision.
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Background

    The Dock is a ground-level rail/water bulk commodity transfer and 
storage dock facility that occupies a total of approximately 100 acres 
of property and includes a 2,400-foot vessel berth, two ship loaders, a 
railcar unloader, a dry storage building, approximately 9,000 feet of 
rail trackage on the Dock itself, and approximately 6,300 feet of 
adjacent railcar holding tracks along the shore line. (WCL Exemption 
Pet. 3.) Hallett currently conducts its own switching operations at the 
Dock, utilizing its own locomotive and crews for, among other things, 
water-to-rail transfers of limestone, rail-to-water transfers of blast 
furnace trim and bentonite, and shipments of small volumes of taconite 
and salt. (Id. at 3-4.) The Dock is directly served by WCL and BNSF 
Railway Company (BNSF) and is open to Canadian Pacific Railway/Soo Line 
Railroad Company and Union Pacific Railroad Company via a BNSF 
reciprocal switch. (Id. at 4.) WCL estimates that it moves 
approximately 90% of the Dock's rail traffic volume. (Id.)
    WCL states that, in response to Hallett's decision to sell the 
Dock, it entered into an Asset Purchase Agreement, dated as of November 
8, 2019, with Hallett to acquire the Dock and ensure its continued 
operation. (Id. at 4-5.) WCL states that continued operation of the 
Dock is vital to its customers and to WCL's ability to fulfill its 
commitments to handle their traffic. (Id. at 5.) WCL further asserts 
that the proposed transaction ``will preserve operation of Hallett Dock 
No. 5 under WCL ownership[,]'' (id.), and ``will bring the dock within 
the Board's jurisdiction as part of the national rail network,'' (id. 
at 16). Two shippers have stated their support for WCL's objective. 
(See U.S. Steel Corp. Letter 1 (noting the Dock's importance to United 
States Steel Corporation's supply chain and urging Board to approve 
WCL's petition); WCL Request 4, Dec. 17, 2019 (letter from shipper 
Cleveland-Cliffs Inc. stating the Dock's importance to its supply 
chain).)
    WCL further states that it ``does not intend to implement 
significant changes in the railcar handling and commodity transfer and 
storage currently conducted at [the Dock].'' (WCL Exemption Pet. 5.) 
Similarly, WCL ``expects to retain most if not all'' of Hallett's 
existing employees who operate the Dock. (Id.) WCL intends to operate 
the Dock ``as an open dock, with transfer and handling services equally 
available to any interested parties as capacity and existing customer 
commitments permit during shipping season.'' (Id.)

Discussion and Conclusions

    Under 49 U.S.C. 10901, a rail carrier may not operate an extended 
or additional railroad line without the prior approval of the Board. 
However, under 49 U.S.C. 10502(a), the Board must exempt a transaction 
or service from regulation upon finding that: (1) Regulation is not 
necessary to carry out the transportation policy of 49 U.S.C. 10101; 
and (2) either (a) the transaction or service is of limited scope, or 
(b) regulation is not needed to protect shippers from the abuse of 
market power.
    Detailed scrutiny of the proposed transaction through an 
application for review and approval under 49 U.S.C. 10901 is not 
necessary here to carry out the rail transportation policy. The 
proposed transaction would ensure continued rail/water operations at 
the Dock. As such, the proposed transaction would, among other things, 
ensure the continuation of a sound rail transportation system with 
effective

[[Page 12648]]

competition among rail carriers (49 U.S.C. 10101(4)) and foster sound 
economic conditions in transportation and ensure effective competition 
(49 U.S.C. 10101(5)). Further, an exemption from the application 
process would expedite regulatory action (49 U.S.C. 10101(2)), reduce 
regulatory barriers (49 U.S.C. 10101(7)), and provide for the 
expeditious handling and resolution of this proceeding (49 U.S.C. 
10101(15)). Other aspects of the rail transportation policy would not 
be adversely affected.
    Regulation of this transaction is not needed to protect shippers 
from the abuse of market power. There would be no loss of rail 
competition and no adverse change in the competitive balance in the 
transportation market, as WCL would continue operations at the Dock 
that are currently provided by Hallett. Nor would there be a change in 
the level of service to any shippers because WCL does not intend to 
implement significant changes to operations and intends to fulfill 
Hallett's existing contractual arrangements for Dock services and to 
make services available to any interested parties as capacity 
allows.\3\ (See WCL Exemption Pet. at 5.) Moreover, WCL's ownership and 
operation of the Dock will be subject to WCL's obligations as a common 
carrier. No shippers have objected to the transaction, and two have 
stated their support.
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    \3\ Because the Board concludes that regulation is not needed to 
protect shippers from the abuse of market power, it is unnecessary 
to determine whether the proposed transaction is limited in scope. 
See 49 U.S.C. 10502(a).
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    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a rail carrier of its statutory obligation to 
protect the interests of its employees. However, labor protective 
conditions may not be imposed on transactions under 49 U.S.C. 10901. 
See 49 U.S.C. 10901(c).
    WCL states that the proposed transaction will not result in changes 
in existing rail carrier operations or existing operations at the Dock 
that would exceed the applicable thresholds of 49 CFR 1105.7(e)(4) or 
(5). Therefore, under 49 CFR 1105.6(c), this transaction is 
categorically excluded from environmental review. Similarly, under 49 
CFR 1105.8(b)(1), no historic report is required because the subject 
transaction is for continued rail service, WCL has indicated no plans 
to alter railroad properties 50 years old or older, and any abandonment 
of service would be subject to Board jurisdiction.
    As noted above, WCL seeks expedited consideration so that it can 
commence operation of the Dock in advance of the Lake Superior shipping 
season. For that reason, the exemption will be effective March 27, 
2020, petitions to stay will be due by March 9, 2020, and petitions for 
reconsideration and petitions to reopen will be due by March 17, 2020.
    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts WCL's operation of 
Hallett Dock No. 5 from the prior approval requirements of 49 U.S.C. 
10901.
    2. Notice of the exemption will be published in the Federal 
Register.
    3. The exemption will be effective on March 27, 2020.
    4. Petitions to stay must be filed by March 9, 2020. Petitions for 
reconsideration and petitions to reopen must be filed by March 17, 
2020.

    Decided: February 26, 2020.

    By the Board, Board Members Begeman, Fuchs, and Oberman.
Brendetta Jones,
Clearance Clerk.
[FR Doc. 2020-04275 Filed 3-2-20; 8:45 am]
 BILLING CODE 4915-01-P