Agreement Reached in Amtrak Gulf Coast Dispute (UPDATED With Additional Commentary)

Written by David Peter Alan, Contributing Editor
image description

STB Chair Marty Oberman said new leadership at Norfolk Southern (Alan Shaw, left) and CSX (Joe Hinrichs, right) “brought a fresh constructive approach to resolving the matter” with Amtrak, led by Stephen Gardner (center).

Slightly more than one week before the final hearing scheduled before the Surface Transportation Board (STB) concerning proposed Amtrak service between New Orleans and Mobile, the parties apparently have settled their differences.

Amtrak, CSX, Norfolk Southern and the Port of Mobile filed a Joint Motion (Docket No. FD-36496) to hold the Nov. 30 hearing, and a Dec. 7 meeting at which the STB would render its decision, in abeyance, saying, “The Parties have agreed to settlement terms that, when fully implemented, will lead to a complete resolution of this proceeding.”

The Board approved that request on Nov. 22, issuing a decision enabling the parties “to effectuate the conditions of the settlement agreement.” STB’s unanimous decision is classified as Document No. 51507, which recounts procedural history and can also be found on the STB website.

“The Board has stated many times our strong preference for private parties to operate in good faith and to amicably resolve disputes on their own whenever possible to obviate the need for Board action.” – Marty Oberman

“The Board appreciates the successful efforts of Amtrak, CSX, NS, and the Port to settle this important case,” said Chair Marty Oberman. “I particularly want to acknowledge the significant progress that has been made in achieving a settlement under [chief executives Joe Hinrichs and Alan Shaw,] the new leadership of CSX and NS [respectively], which I expect brought a fresh constructive approach to resolving the matter. The Board has stated many times our strong preference for private parties to operate in good faith and to amicably resolve disputes on their own whenever possible to obviate the need for Board action. The settlement of this case will hasten the return of passenger rail operations in the Gulf. This will result in a substantial public benefit by providing a public transportation option for Gulf Coast residents and visitors alike and will have a very positive impact on the economy of the region. I look forward to the parties informing us of the specific infrastructure improvements that will be made to the rail network as a result of the settlement. Finally, I would like to extend the Board’s thanks to the mediators in this case. Board staff worked with mediators from the Federal Mediation and Conciliation Service to mediate this case, and we are grateful for all their hard work.”

The dispute was brought before the Board in 2021. Since then, there had been a public hearing in February and an 11-day evidentiary hearing (essentially a trial, with witnesses) last spring. Potential host railroads CSX and NS vigorously opposed Amtrak’s petition throughout the proceeding. The Alabama State Port Authority, which operates the Port of Mobile and its rail division, the Terminal Railway Alabama State Docks (TASD), later received permission from the Board to intervene on the side of the potential host railroads.

The Board ordered mediation in the case after the portion of the trial in May, and the mediation efforts continued through the summer, even though the parties filed briefs in July that essentially reaffirmed the arguments that they had made previously. The parties acknowledged the assistance of the mediators in their latest document, saying they “greatly appreciate the diligent efforts of the Board-appointed mediators over the past several months to facilitate this settlement.” While they expressed their expectation that certain undisclosed conditions required for the settlement would be met during the coming months, they concluded by saying that they would file a joint status report before June 30, 2023, if the terms of the settlement had not been fulfilled by then.

The original document contained representations from the parties, but they were redacted from the public version, so the specifics are currently undisclosed. “We have collectively reached an agreement to support passenger and freight service in the Gulf Coast Corridor,” the parties said in a joint statement. “Due to the confidential nature of the settlement agreement, the parties are not able to provide further comment at this time.” Still, the announcement that a settlement has been reached has brought an air of hopeful expectancy to those concerned.

Until the settlement was announced, it appeared that the matter would remain contentious. Both sides argued their cases strongly, even in July, while mediation was ongoing. The STB had scheduled the final hearing for Nov. 17 and 18, postponing it two weeks (as requested in Document 305618, filed Nov.10), in the hope that the mediation process could settle the matter. In our previous coverage, we had referred to the case as a “slugfest,” dividing the proceedings into “rounds.” Round 9 was fought through briefs filed in July, and the now-cancelled Nov. 30 hearing would have been Round 10.

John Sharp reported on the prospective deal in the Nov. 22 edition of Mobile’s Press Register that “the project was celebrated mostly by public officials in Mississippi and Louisiana, while Alabama mostly opposed or raised concerns about how the restarted service would interfere with port operations in Mobile.” He also reported that some local Mobile officials did not follow that pattern: “The Mobile City Council entered the fray in February 2020, before the COVID-19 pandemic overwhelmed public policy. The Council, on Feb. 4 of that year, voted 6-1 to support a resolution to back Amtrak’s Gulf Coast service with future city funds. The lone ‘no’ vote came from [Republican District 5] Councilman Joel Daves, who argued that the service would be nothing more than a ‘joyride for the affluent.’”

“ I look forward to riding Amtrak to stations in Bay St. Louis, Gulfport, Biloxi, and Pascagoula again soon.” – U.S. Senate Committee on Commerce, Science, and Transportation senior Republican Roger Wicker (R-Miss.)

One of the most vocal boosters of the proposed service is Sen. Roger Wicker (R-Miss.), senior Republican on the Senate Committee on Commerce, Science, and Transportation. “Today’s agreement is a long overdue win for Mississippi’s Gulf Coast communities, businesses and job creators,” Wicker said in a Nov. 22 statement. “Residents of the Mississippi Gulf Coast have been without passenger rail service since Hurricane Katrina, and restoring it has been a top priority of mine. Now, more than 17 years after Katrina, I am pleased to have a commitment from all parties involved that Amtrak trains will return. This decision demonstrates what I have long believed—that freight and passenger rail can thrive together.

“I commend the leadership of Amtrak, the host railroads, and the Port of Mobile for their diligent work to reach this resolution. I would also like to express appreciation to the Southern Rail Commission. They have commissioned reports, participated in working groups, performed studies and devoted thousands of hours to this effort. I will continue to support them as they work to implement this agreement and shift to overseeing the restored passenger service.

“I appreciate the time and attention devoted by the members of the Surface Transportation Board, who presided over 11 days of evidentiary hearings earlier this year. They have kept this matter a priority while allowing mediation to proceed, enabling the parties to reach a negotiated resolution. I look forward to riding Amtrak to stations in Bay St. Louis, Gulfport, Biloxi, and Pascagoula again soon.”

Knox Ross, also a Mississippian and chair of the Southern Rail Commission, said, “I’m delighted by this settlement agreement, and we will continue to build on this momentum by working with all involved parties—especially the communities who have been waiting so long for passenger rail—to prepare for service to start. The settlement indicates a bright future for passenger rail service not only along the Gulf Coast, but throughout the Southern United States. Collaboration and effective negotiations between passenger rail providers, the freight rail industry, and our local, state and federal government agencies proves that there is a path forward for re-establishing and expanding passenger rail service.”

It appears that Wicker’s and Ross’s hopes, along with those of many passenger rail advocates and residents of the area, will soon be fulfilled. Plans call for two round trips per day between New Orleans and Mobile, with the four stops along the Mississippi Gulf Coast Wicker mentioned. The 145-mile trip between New Orleans and Mobile is scheduled to take 3 hours and 25 minutes.

The Gulf Coast case has national implications, as it tested a provision in Amtrak’s enabling legislation, the Rail Passenger Service Act of 1970, that requires freight railroads to provide access to Amtrak trains in exchange for being relieved of their common-carrier obligations to operate passenger service. The future of Amtrak’s entire ConnectsUS plan, with proposals to open many new lines on host freight railroads by 2035, could ride on this case.

The major contested issues were how much infrastructure must be built along the route to accommodate the new passenger trains as well as existing freight service, and at what cost, and where a station will be located in Mobile. Until additional information about the settlement is released, the specter of a multi-year wait before passenger trains again call at Mobile and four towns along the Mississippi Gulf Coast seems to be evaporating. It now appears that such trains will run again—eventually.

Wilner Weighs In

“It doesn’t take an MBA candidate to calculate the cost of annoying the senior Republican on the railroad-oversight Senate Commerce Committee who is but one Democratic-seat loss away from becoming the chairperson,” commented Railway Age Capitol Hill Contributing Editor Frank N. Wilner. “But note well that the real political divide is over the Amtrak subsidy, not the availability of passenger rail. Likely with a Republican-controlled House. we are going to see over the next two years numerous trips by Stephen Gardner for grilling before the Republican controlled House T&I Committee—a redux of the theater provided by former Rep. John Mica (R-Fla.) when committee chairperson who emphatically distinguished himself as the national passenger railroad’s enduring and annoying hemorrhoid.

“This will be part of a broader political battle playing up to the 2024 elections, including a game of chicken with Democrats over raising the federal debt limit and a non-stop political fight to curtail federal spending that continues to balloon, negating the inflation-fighting interest rate hikes of the Federal Reserve. With Republicans having a slim House majority and Democrats a razor-thin Senate majority, the next two years are going to be quite theatrical politically, with little accomplished but the raising of voices and pandering to the political base.

“Adding to the political drama when the new Congress reorganizes in January, the politically moderate Sen. Wicker (his score by the conservative Heritage Foundation is 67%) likely will move to the senior Republican slot on the Armed Services Committee, with Sen. Ted Cruz (with a 98% Heritage Foundation score) likely becoming Commerce Committee senior Republican. The Heritage Foundation has been the most vocal entity opposing Amtrak subsidies.

“Putting Cruz’s 98% Heritage Foundation score in context against Wicker’s 67%, Cruz’s is two percentage points higher than Rep. Marjorie Taylor Greene and 34 percentage points higher than Senate Minority Leader Mitch McConnell. No senator scores higher than Cruz’s 98%, and only four others are at 98%—John Boozman of Montana, James Lankford of Oklahoma, Marco Rubio of Florida and Rick Scott of Florida.”

Tags: ,