Robert Primus and Michelle Schultz, whose confirmation as the fourth and fifth members of the U.S. Surface Transportation Board have been on hold for months, were confirmed by the U.S. Senate late on Nov. 18. They are expected to be sworn in shortly, giving the STB its full complement of five members, a number set by the 2015 Surface Transportation Board Reauthorization Act.
Surface Transportation Board
“Examining the Surface Transportation Board’s Role in Ensuring a Robust Passenger Rail System” was the topic of a virtual Nov. 18 hearing before the U.S. House of Representatives Committee on Transportation and Infrastructure, Subcommittee on Railroads, Pipelines, and Hazardous Materials.
The proposed Uinta Basin Railway to be constructed in Utah now has a recommended route. The Surface Transportation Board’s (STB) Office of Environmental Analysis has issued a Draft Environmental Impact Statement (EIS) recommending the 88-mile Whitmore Park Alternative.
Denver-based OmniTRAX is linking rail-served properties along its 25-mile Northern Ohio & Western Railway (NOW) with customers interested in locating there, in coordination with the Tiffin-Seneca Economic Partnership, which serves the counties of Tiffin and Seneca, Ohio. Additionally, Watco Companies, LLC, will lease and operate a line from CN subsidiary Wisconsin Central Ltd. in Illinois. Previously known as the Phoenix Line, Watco’s new subsidiary is now called the Elwood Joliet & Southern Railroad (EJSR). The Jeffersonville RiverRail Terminal in Indiana is set to open early next year, to be served by Louisville & Indiana Railroad (LIRC), an Anacostia Rail Holdings Co. subsidiary, and American Commercial Barge Line.
The Surface Transportation Board has determined that five of the “Big 7” U.S. Class I railroads achieved revenue adequacy in 2019: BNSF, CSX, Norfolk Southern, Soo Line (the U.S. affiliate of Canadian Pacific) and Union Pacific. STB determined that those Class I’s achieved a rate of return on investment (ROI) equal to or greater than the Board’s calculation of the average cost of capital for the freight rail industry, which for 2019 is 9.34%.
The Surface Transportation Board and Federal Railroad Administration on Aug. 24 sent joint, identical letters to the CEOs of the seven North American Class I’s—Carl Ice (BNSF), Keith Creel (Canadian Pacific), JJ Ruest (CN), Jim Foote (CSX), Pat Ottensmeyer (Kansas City Southern), Jim Squires (Norfolk Southern) and Lance Fritz (Union Pacific)—citing service problems and “increased communication and transparency with rail shippers.”
Chicago’s Metra commuter rail agency on July 21 asked the Surface Transportation Board (STB) to issue a preliminary injunction to prevent Union Pacific from “taking planned steps that would degrade or halt” commuter rail service on the three lines—UP North, UP Northwest and UP West—the Class I railroad operates and maintains equipment under contract. Separately, Metra also asked the STB to rule on whether UP has a legal common-carrier obligation to provide commuter service. “UP maintains that it has no such obligation,” Metra said, adding that it “strongly disagrees” with UP’s position and that “settling that dispute is critical to determining how service will continue to operate on the lines and, more important, what it will cost the public.”
WATCHING WASHINGTON, JUNE 2020 ISSUE: This question should be at the forefront of the Surface Transportation Board’s agenda: What is the future of rail freight transportation? The STB should put all its other discretionary regulatory work to the side and call in the railroads and key stakeholders and facilitate a discussion of how the industry can recover to serve the future American economy. All internecine sniping and conflict should be pushed aside.
WATCHING WASHINGTON, RAILWAY AGE APRIL 2020 ISSUE: Although shippers lacking effective transportation alternatives to rail are relatively few, the Surface Transportation Board (STB) exists to protect them from market-power abuse, as railroads earn substantial margins from the traffic.
“When the facts change, I change my mind. What do you do, sir?” — John Maynard Keynes