[Federal Register Volume 90, Number 150 (Thursday, August 7, 2025)]
[Notices]
[Pages 38197-38200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-15012]
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SURFACE TRANSPORTATION BOARD
[Docket No. FD 36489, Docket No. FD 36723, Docket No. FD 36723 (Sub-No.
1)]
Savannah Industrial Transportation, LLC--Operation Exemption--In
Effingham County, Ga.; Savannah Industrial Logistics, LLC--Construction
Exemption--In Effingham County, Ga.; Savannah Industrial
Transportation, LLC--Lease and Operation Exemption--Line of Savannah
Industrial Logistics, LLC--In Effingham County, Ga.
In a filing submitted on September 28, 2023, Savannah Industrial
Logistics, LLC (SIL), a noncarrier affiliate of Savannah Industrial
Transportation, LLC (SIT), seeks an after-the-fact exemption, under 49
U.S.C. 10502, from the prior approval requirements of 49 U.S.C. 10901
for the construction of a rail line (the Line) located in an industrial
park (the Facility) near Rincon, in Effingham County, Ga. (Pet. 1,
Sept. 28, 2023, FD 36723 et al.) The Line, which has no mileposts,
extends from a connection with Norfolk Southern Railway Company (NSR)
near NSR milepost 16.6 to a connection with CSX Transportation, Inc.
(CSXT), near CSXT milepost S484.0, a distance of approximately 11,404
feet. (Id. at 4.)
In the same filing, SIT seeks an after-the-fact exemption, under
section 10502, from the prior approval requirements of section 10901 to
lease and operate the Line pursuant to a lease with SIL. (See Pet. 2,
Sept. 28, 2023, FD 36723 et al.) SIT and SIL are each holdings of
OmniTRAX Holdings Combined, Inc. (OmniTRAX). (Id. at 2 n.1.)
By decision served on December 27, 2023, the Board instituted a
proceeding under 49 U.S.C. 10502(b) in both dockets. Savannah Indus.
Transp.--Lease & Operation Exemption--Line of Savannah Indus. Logistics
in Effingham Cnty., Ga., FD 36723 et al., slip op. at 2 (STB served
Dec. 27, 2023). No comments opposing either petition have been filed.
The Board's Office of Environmental Analysis (OEA) issued a Draft
Environmental Assessment (Draft EA) in both dockets on April 11, 2025,
in which it analyzed the potential environmental impacts of the
construction and operation of the Line and requested public comments,
as required by the National Environmental Policy Act (NEPA), 42 U.S.C.
4321-4370m-11. A Final Environmental Assessment (Final EA), which
incorporated the Draft EA by reference and responded to the only
comment received on the Draft EA, was issued on May 23, 2025. The Final
EA recommended that one environmental condition be imposed to avoid,
minimize, or mitigate the potential environmental impacts of the after-
the-fact construction and lease and operation of the Line.
After considering both the rail transportation merits and the
potential environmental impacts, the Board will grant SIL's petition
for exemption for after-the-fact authority to construct the Line and
SIT's petition for exemption for after-the-fact authority to lease and
operate the Line, subject to the environmental mitigation measure
recommended in the Final EA.
Background
Before the petitions in Docket Nos. FD 36723 and FD 36723 (Sub-No.
1) were filed, SIT filed a petition for an exemption from the prior
approval requirements of section 10901 to operate as a common carrier
over the Line, which it leased from SIL. (Pet. 1, May 11, 2021, FD
36489.) \1\ SIT stated that SIL completed construction of the Line in
2020 as part of a larger project involving the Facility, which is
located approximately 11 miles northwest of the Port of Savannah, Ga.,
and has access to existing NSR and CSXT rail lines. (Id. at 2-3.) The
petition stated that the Facility's dual access to NSR and CSXT
``ma[de] the location highly attractive to rail shippers,'' and SIL and
SIT ``expect[ed] to be able to attract numerous railroad service-
dependent customers to the Facility.'' (Id. at 3.)
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\1\ These proceedings are not consolidated. A single decision is
being issued for administrative convenience.
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According to SIT, the Line was constructed without Board authority
because, during the planning and construction of the Facility and the
Line, SIT and SIL anticipated that SIT would function as a private
switching carrier within the Facility. (Id. at 3, 5-
[[Page 38198]]
6.) SIT's petition stated that it believed at that time that acting as
a private carrier would offer certain cost and administrative
advantages over becoming a common carrier. (Id. at 3, 6.) SIT asserted
that it had anticipated that NSR and CSXT would be the origin or
destination carriers on the waybills for shipments to or from the
Facility. (Id. at 3.) According to SIT, NSR and CSXT had proposed to
pay SIT a per-car private carriage switching allowance for SIT's
placement and retrieval of cars within the Facility, which was
initially acceptable to SIT. (Id. at 3, 6.) SIT represented that after
the Line was completed, it discovered that NSR and CSXT intended to
transmit payment to SIT for its services only once or twice a year.
(Id.) SIT stated that being paid, at best, twice a year would not
provide it with the cash flow necessary to sustain its operations. (Id.
at 6.) SIT determined that it would be paid more regularly if it became
a common carrier, which prompted it to seek Board authority to operate
the Line. (Id.)
In a decision served August 1, 2023, the Board found that, based on
OmniTRAX's prior statements to OEA and other evidence filed in the
case, SIT and its parent company, OmniTRAX, intended to operate the
Line as a common carrier rail line, for which Board authority should
have been obtained under section 10901 before construction commenced.
See Savannah Indus. Transp., LLC--Operation Exemption--in Effingham
Cnty., Ga. (August 2023 Decision), FD 36489, slip op. at 4-5 (STB
served Aug. 1, 2023). As a result, the Board held SIT's petition for
operating authority in abeyance and ordered SIL to file for after-the-
fact construction authority and SIT to file for after-the-fact
acquisition authority. Id. at 7-8. The Board also granted SIT a limited
exemption to continue providing service to any shippers located on the
Line as of August 1, 2023, during the pendency of the after-the-fact
authority proceedings. Id. at 6, 7. On August 30, 2023, SIT informed
the Board that, as of that date, it was providing rail service to only
one shipper on the Line, Quantix SCS, Inc. (Quantix), f/k/a A&R
Logistics, Inc. (SIT Suppl. 1, Aug. 30, 2023, FD 36489.)
As noted above, on September 28, 2023, SIL and SIT submitted a
joint filing in Docket Nos. FD 36723 and FD 36723 (Sub-No. 1), seeking
after-the-fact exemptions permitting SIL to construct, and SIT to lease
and operate, the Line.\2\ On December 27, 2023, the Board instituted a
proceeding under section 10502(b) in those dockets and held SIT's
petition for lease and operating authority in abeyance during the
pendency of SIL's construction proceeding. See Savannah Indus. Transp.,
FD 36723 et al., slip op. at 2 (STB served Dec. 27, 2023).\3\
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\2\ Because SIL would become a rail carrier if its request for
after-the-fact authority to construct the Track were granted,
OmniTRAX and HGS Railway Holdings, Inc. (together, Omni-HGS), both
noncarriers, filed a verified notice of exemption to continue in
control of SIL upon SIL becoming a rail carrier. See OmniTRAX
Holdings Combined, Inc.--Continuance in Control Exemption--Savannah
Indus. Logistics, LLC, FD 36723 (Sub-No. 2). Notice of the exemption
was served and published in the Federal Register on October 13, 2023
(88 FR 71,071), and the exemption became effective on October 28,
2023. Omni-HGS filed for authority to continue in control of SIT in
2021 when SIT filed for operating authority in Docket No. FD 36489.
See OmniTRAX Holdings Combined, Inc.--Control Exemption--Savannah
Indus. Transp., LLC, FD 36490 (STB served May 27, 2021) (86 FR
28,671).
\3\ In a decision served on May 28, 2024, the Board denied a
petition from SIL and SIT seeking authority for SIT to serve
additional shippers during the pending construction and lease and
operation proceedings. See Savannah Indus. Transp., FD 36489 et al.,
slip op. at 3 (STB served May 28, 2024). The Board reiterated that
the August 2023 Decision allowed SIT to provide rail service only to
Quantix--the one shipper that was already located on the line and
receiving rail service. Id.
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In their requests for after-the-fact construction and lease and
operation authority, SIL and SIT state that exemptions under section
10502 from the prior approval requirements of section 10901 would,
among other things, ensure the development and continuation of a sound
rail transportation system by fostering effective competition among
rail carriers and with other modes to meet the needs of the public.
(Pet. 8, Sept. 28, 2023, FD 36723 et al.) They state that the requested
exemptions would foster continued alternative transportation options
for all current and future tenants at the Facility who are, and will
be, afforded nearby connections to NSR and CSXT. (Id.) SIL and SIT
further assert that applications for construction and lease and
operation authority under section 10901 are not necessary to carry out
the rail transportation policy (RTP), see 49 U.S.C. 10101, that the
exemptions would promote several provisions of the RTP, and that
requiring applications under section 10901 is not necessary to protect
shippers from an abuse of market power. (Pet. 8-10, Sept. 28, 2023, FD
36723 et al.)
Discussion
Rail Transportation Policy Analysis. The construction of a new rail
line requires prior Board authorization, either through a certificate
under section 10901 or, as requested here, an exemption under 49 U.S.C.
10502(a) from the prior approval requirements of section 10901. ``In
either case, the [statute] expresses a clear presumption in favor of
approving railways.'' Seven Cnty. Infrastructure Coal. v. Eagle Cnty.,
145 S. Ct. 1497, 1519 (2025) (Sotomayor, J., concurring); see also N.
Plains Res. Council v. STB, 668 F.3d 1067, 1091-92 (9th Cir. 2011)
(agreeing that there is a statutory ``presumption for construction'');
Mid States Coal. for Progress v. STB, 345 F.3d 520, 552 (8th Cir. 2003)
(same). Under 49 U.S.C. 10901(c), the Board must grant a rail
construction proposal unless it finds the proposal is ``inconsistent
with the public convenience and necessity.'' See Alaska R.R.--Constr. &
Operation Exemption--A Rail Line Extension to Port MacKenzie, Alaska,
FD 35095, slip op. at 5 (STB served Nov. 21, 2011) (describing the
Board's construction exemption process), aff'd sub nom. Alaska Survival
v. STB, 705 F.3d 1073 (9th Cir. 2013). In addition, the lease and
operation of a rail line by a Class III rail carrier requires prior
approval from the Board under 49 U.S.C. 10902 or, as requested here, an
exemption under section 10502(a) from the prior approval requirements
of section 10902.\4\
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\4\ Although SIT filed its petition for lease and operation
authority under 49 U.S.C. 10901, SIT has been operating as a Class
III rail carrier pursuant to the limited exemption granted to it by
the Board in August 2023 Decision, FD 36489, slip op. at 6, 7. SIT's
petition is therefore more appropriately considered under section
10902, which applies to lease and operation transactions, among
other transaction types, filed by Class II and Class III rail
carriers.
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Under section 10502(a), the Board shall, to the maximum extent
permissible, exempt a proposal to construct a new rail line from the
prior approval requirements of section 10901 when the Board finds that:
(1) those procedures are not necessary to carry out the RTP; and (2)
either (a) the proposal is of limited scope, or (b) the full
application procedures are not necessary to protect shippers from an
abuse of market power. The same exemption standard applies to a
proposal to lease and operate a rail line filed by a Class II or Class
III rail carrier that would otherwise require approval under section
10902.
Based on the record, the proposed after-the-fact construction,
lease, and operation--which are unopposed--qualify for exemptions under
section 10502 from the formal application procedures of section 10901
and 10902. Detailed scrutiny of the proposed transactions through
applications for review under sections 10901 and 10902 is not necessary
here to carry out the RTP. The record shows that the Line
[[Page 38199]]
would provide a rail transportation option to current and future
tenants at the Facility. By providing the Facility's shippers with a
freight rail option that does not currently exist (except for the
limited exemption previously granted to serve Quantix during the
pendency of these proceedings), the Line would foster the development
and continuation of a sound rail transportation system with effective
competition and coordination between rail carriers and other
transportation modes and meet the needs of the public (49 U.S.C.
10101(4), (5)). Also, by supporting truck-to-rail diversions, the rail
transportation on the Line would increase energy efficiency across
modes, thereby encouraging and promoting energy conservation (49 U.S.C.
10101(14)). In addition, exempting the proposed transactions would
promote the RTP by minimizing the need for federal regulatory control
over the rail transportation system, reducing regulatory barriers to
entry, and providing for the expeditious handling and resolution of
regulatory proceedings (49 U.S.C. 10101(2), (7), (15)). Other aspects
of the RTP will not be adversely affected. No issues about the Line's
current or future financial viability have been raised.
Moreover, consideration of the proposed construction of the Line
under section 10901 and the proposed lease and operation of the Line
under section 10902 is not necessary to protect shippers from an abuse
of market power.\5\ As explained, the Line would enhance competition,
thereby creating an alternative mode of transportation for current and
future shippers at the Facility.\6\
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\5\ Given this finding regarding the lack of need for shipper
protection, the Board need not determine whether the transaction is
limited in scope. 49 U.S.C. 10502(a)(2).
\6\ In light of the lease and operation exemption in Docket No.
FD 36723 (Sub-No. 1), the Board finds SIT's previously filed
petition for operating authority in Docket No. FD 36489 to be moot,
and that proceeding will be discontinued.
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Environmental Analysis. NEPA requires federal agencies to examine
the environmental impacts of proposed federal actions and to inform the
public concerning those effects. See Balt. Gas & Elec. Co. v. Nat. Res.
Def. Council, 462 U.S. 87, 97 (1983). Under NEPA and related
environmental laws, the Board must consider significant potential
beneficial and adverse environmental impacts in deciding whether to
authorize the construction of a new rail line as proposed, deny the
proposal, or grant it with conditions (including environmental
mitigation conditions). Lone Star R.R.--Track Constr. & Operation
Exemption--in Howard Cnty., Tex., FD 35874, slip op, at 4 (STB served
Mar. 3, 2016). The Board has ``substantial discretion'' in assessing
the facts relevant to its environmental review and the relevant
impacts. Seven Cnty., 145 S. Ct. at 1512. It also has ``broad
latitude'' to ``draw a `manageable line''' regarding the scope if its
inquiry. Id. at 1513 (citing DOT v. Public Citizen, 541 U.S. 752, 767
(2004)). NEPA does not require that the Board evaluate potential
environmental effects arising from ``future or geographically separate
projects,'' ``particularly'' those over which the Board does not
``exercise regulatory authority.'' Seven Cnty., 145 S. Ct. at 1515-17;
see also id. at 1515 (``Importantly the textually mandated focus of
NEPA is the `proposed action'--that is, the project at hand, not other
future or geographically separate projects that may be built (or
expanded) as a result of or in the wake of the immediate project under
consideration.'') (citing 42 U.S.C. 4332(2)(C)).
Moreover, while NEPA prescribes a process that must be followed, it
does not mandate a particular result. See Seven Cnty., 145 S. Ct. at
1510 (citing Robertson v. Methow Valley Citizens Council, 490 U.S. 332,
350 (1989)). Nor does NEPA otherwise impose any ``substantive
constraints on the agency's ultimate decision to build, fund, or
approve a proposed project.'' Seven Cnty., 145 S. Ct. at 1511; see also
Robertson, 490 U.S. at 350-51. Rather, in making such decisions the
Board may ``weigh environmental consequences as [it] reasonably sees
fit under its governing statute and any relevant substantive
environmental laws,'' and may conclude that ``other values outweigh the
environmental costs.'' See Seven Cnty., 145 S. Ct. at 1507, 1510
(citing Robertson, 490 U.S. at 350).
OEA has conducted a thorough environmental and historic review in
this case. The Draft EA considered both the proposed action (after-the-
fact construction and lease and operation as a common carrier) \7\ and
the no-action alternative (in which operations would cease). (Draft EA
S-2-S-3.) OEA analyzed both the potential environmental impacts that
could have resulted from construction of the Line, where possible, and
the environmental potential impacts that could result from the
continued operation of the Line. (Draft EA S-3.) In the Draft EA, OEA
concluded that the proposed action would have no or de minimis impacts
in most environmental resource areas, including air quality, energy,
transportation, land use, noise, hazardous materials, and cultural
resources, (id. at S3 to S4), and that it would have had minor impacts
on biological resources from construction of the Line and would have de
minimis impacts from continued operations, (id. at 43). OEA also
concluded that the proposed action would have minimal impacts on water
and recommended one mitigation measure, requiring SIT to inspect all
project-related culverts semi-annually (or more frequently, as seasonal
flows dictate) for debris accumulation and remove and properly dispose
of debris, to further minimize or avoid impacts to water from continued
rail operations. (Id. at 51, 63.) In addition, OEA explained in the
Draft EA that an Environmental Impact Statement (EIS) is unnecessary
and that an EA is the appropriate level of environmental documentation
for these proceedings. (Id. at 4-5.)
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\7\ As explained above and in the Draft EA, the proposed action
would not involve any new rail construction, as the Line was
constructed in 2020.
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OEA received one comment on the Draft EA from the U.S. Fish and
Wildlife Service (USFWS), indicating that it had no concerns with the
statements or Endangered Species Act (ESA) determinations in the Draft
EA. (See Final EA 2.) USFWS reaffirmed its earlier comment in response
to OEA's preliminary consultation that the project is not anticipated
to impact species listed under the ESA. (Id.) The Final EA, issued on
May 23, 2025, summarized USFWS's new comment and determined that the
comment did not require any changes to the analysis in the Draft EA or
the recommended mitigation. (Id. at 2, 5.)
The Board will adopt the analysis and conclusions made by OEA in
both the Draft EA and Final EA, including OEA's final recommended
environmental mitigation measure set forth in the Appendix to this
decision. The Board is satisfied that OEA has taken the requisite hard
look at the potential environmental impacts associated with the after-
the-fact construction and lease and operation of the Line and properly
determined that, with the final recommended environmental mitigation,
the proposed action will not result in potentially significant
environmental impacts, and that preparation of an EIS is unnecessary.
Employee Protection. 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, 49
U.S.C. 10901(c) states that when authorizing a transaction governed by
section 10901 the Board may require compliance with conditions
[[Page 38200]]
``other than labor protective conditions'' that are necessary in the
public interest. Further, 49 U.S.C. 10902(d) precludes the Board from
imposing labor protection for Class III carriers (such as SIT)
receiving authority under 49 U.S.C. 10902. Accordingly, the Board may
not impose labor protective conditions here.
Conclusion
The after-the-fact construction and lease and operation of the Line
will give shippers an additional freight rail option, which will
support competition to meet the needs of the public, and there will be
no potential for significant environmental effects. After carefully
considering the transportation merits and OEA's environmental analysis
and recommendations, the Board, considering the entire record, finds
that the petitions for after-the-fact exemptions for SIL's construction
of the Line and SIT's lease and operation of the Line should be
granted, subject to compliance with the environmental mitigation
measure recommended in the Final EA and set forth in the Appendix to
this decision.
This action, as conditioned, will not significantly impact the
quality of the human environment or the conservation of energy
resources.
It is ordered:
1. Under 49 U.S.C. 10502, the Board exempts SIL's construction of
the Line from the prior approval requirements of 49 U.S.C. 10901.
2. Under 49 U.S.C. 10502, the Board exempts SIT's lease and
operation of the Line from the prior approval requirements of 49 U.S.C.
10902.
3. Docket No. FD 36489 is discontinued.
4. The Board adopts the environmental mitigation measure set forth
in the Appendix to this decision and imposes it as a condition to the
exemptions granted here.
5. Notice will be published in the Federal Register.
6. Petitions for reconsideration must be filed by August 27, 2025.
7. This decision is effective September 6, 2025.
Decided: August 4, 2025.
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Board Member Primus concurred with a separate expression.
Board Member Primus, concurring:
I support today's decision, which will finally allow customers, in
addition to Quantix, to benefit from SIT's common carrier service
within the Facility, over five years after the Line was constructed.
This long delay was the result of SIL and its parent, OmniTRAX's, ill-
fated decision to construct the Line ostensibly as private track,
despite earlier representations to OEA that the Line would be
jurisdictional common carrier track. Moreover, once the Board ordered
SIL and SIT to seek after-the-fact authority for the construction and
acquisition of the Line, the proceedings were further delayed because
SIL and SIT took six months to select a third-party contractor to
assist OEA in conducting the environmental review.
OmniTRAX, a sophisticated entity with considerable experience in
the rail industry, should have known that Board authority was necessary
prior to commencing construction of this Line. The resulting delay has
been detrimental not only to the parties involved in these proceedings,
but also to potential customers interested in locating within the
Facility to take advantage of the connections to the larger NSR and
CSXT networks. I sincerely hope that the experience of this case will
dissuade any future attempts to evade the Board's licensing processes
and the accompanying environmental review.
Appendix
Water Resources
WAT-MM-1. During rail operations, SIT shall ensure that all
culverts and bridges along the previously constructed rail line are
clear of debris to avoid flow blockages, flow alteration, and
increased flooding. SIT shall inspect all culverts and bridges semi-
annually (or more frequently, as seasonal flows dictate) for debris
accumulation and shall remove and properly dispose of debris
promptly.
Stefan Rice,
Clearance Clerk.
[FR Doc. 2025-15012 Filed 8-6-25; 8:45 am]
BILLING CODE 4915-01-P