Posts Tagged ‘Surface Transportation Board’

SMART TD sends letter to STB opposing CP/NS merger



In a letter dated, January 14, SMART TD President John Previsich wrote the Surface Transportation Board opposing a Canadian Pacific Railway proposal to acquire Norfolk Southern Railroad.

See the letter in its entirety below or click here to read the letter.

“Dear Chairman Elliott, Vice Chairman Miller and Member Begeman:

“I am writing to you on behalf of the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART TD), regarding Canadian Pacific Railway’s (CP) proposal to acquire Norfolk Southern Corporation (NS). 

“As the representative of more than 125,000 active and retired railroad workers, I am writing to convey that we are strongly opposed to this takeover proposal. This action has the real potential for a far-reaching, detrimental impact on America’s rail network, including lost jobs and an equally negative impact on those who ship by rail. We also strongly oppose CP’s scheme to circumvent the regulatory requirements through the establishment of a voting trust to assume control in advance of regulatory approval. Such a trust would violate existing statutory and regulatory prohibitions regarding unlawful control. 

“CP’s relentless pursuit of short-term profit with little regard to the impact on the greater good—workers, communities and our nation’s rail shippers is well known. History shows what happens when railroads harvest revenue for immediate self-enrichment of officers and stockholders at the expense of investing in maintenance and capital projects to ensure a viable industry well into the future. If approved, this merger would mean fewer railroads and less competition in the industry. The certain results will be fewer rail jobs, higher freight rates and diminished rail service. 

“E. Hunter Harrison, CEO of CP, has already boasted in the press that NS will be a “cash cow” because he will be able to sell off what he says are “excess” rail yards for real estate development. He has also stated that NS has a “gold plated” infrastructure that is overly maintained and he could greatly reduce capital investment on that road. Such a disinvestment in the nation’s rail network could only occur in a merged environment with diminished competition among carriers. The end result is higher costs and reduced service for the nation’s shippers.

“In addition, Harrison recently announced that he will reduce capital spending on CP in 2016 by $400 million and extend his moratorium on purchasing new locomotives until 2018 or longer on that railroad. His strategy is clear; use up the current railroad infrastructure and wear out the locomotives, leaving a railroad that will need dramatic investment once he leaves. The railroads’ officers, investment bankers, consultants and stockholders will walk away greatly enriched at the expense of the future health of our nation’s rail service. In fact, a January 12, 2016 white paper issued by CP in Calgary reveals that CP’s scheme for NS is to improve service by reducing investment, a plan that they note in their closing remarks may not produce the desired results: “CP’s forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information” and that “forward-looking information is not a guarantee of future performance.” 

“In summary, if Harrison is allowed to take his CP model to the NS, through either a voting trust or with regulatory approval, the end result will produce an irrecoverable disinvestment in NS’s infrastructure, substantially diminished freight service, and a marked loss of jobs. 

“We urge members of the STB to safeguard our jobs and protect our nation’s freight rail infrastructure and those who ship by rail by advocating for the public interest, not enabling short term profits for the benefit of a few at the expense of the future viability of our nation’s rail system. We ask that the STB reject the proposed acquisition and also take legal action as required to prevent the circumvention of your regulatory authority through the establishment of a voting trust.”

STB chairman releases details of STB Act of 2015

STB_logoLast week, President Obama signed the Surface Transportation Board (STB) Reauthorization Act of 2015 into law, which realigned the STB an independent entity, autonomous of the U.S. Department of Transportation. 

Yesterday, STB Chairman Daniel Elliott III released a summary that outlines the major points and details of the Act. To read the complete press release, click here.

STB to hold meetings on reporting rail service data

STB_logoThe Surface Transportation Board announced today that its staff will hold informal meetings with stakeholders between November 16, 2015 and December 7, 2015, on proposed rules for reporting railroad service performance data in the pending proceeding United States Rail Service Issues, EP 724.

The meetings will enable the STB to better assess what types of data might be useful to the public, and how individual railroads monitor performance. With measures in place to ensure public notice, fairness, and transparency, the Board is waiving its general prohibition on ex parte or private communications for a limited time in this proceeding.

“This will be the Board’s first permanent collection of service-related data. These informal meetings will allow open and candid conversations between STB staff and stakeholders regarding the highly technical data questions at issue here,” STB Chairman Daniel Elliott said. “Dialogue between stakeholders and STB technical staff is especially valuable and efficient in these informal circumstances, outside of an appearance before the Board.”

The Board’s decision announcing the meetings and providing information for their scheduling in United States Rail Service Issues—Performance Data Reporting, EP 724(Sub-No. 4), can be found on the Board’s website,, under “E-LIBRARY” / “Decisions & Notices / 11 / 9 / 2015.”

Capping rail revenues will threaten economic goals



WASHINGTON, D.C. – The Association of American Railroads (AAR), leaders from its member railroads and economic experts today urged federal regulators to beware of upending numerous national economic goals if they choose to pursue re-instituting revenue caps on freight rail companies.

Speaking before a Surface Transportation Board (STB) hearing on railroad revenue adequacy, AAR President and CEO Edward R. Hamberger told the Board that misapplying regulations would have far-reaching impacts on the freight rail industry’s ability to sustain the billions of private funds spent by railroads each year to build, maintain and upgrade the nation’s 140,000-mile rail network.

“As you take up the issue of revenue adequacy, you are painting on a much, much larger canvas than just the inside of this room,” Hamberger said. “What you are considering and may decide here in this hearing room a stone’s throw from the U.S. Capitol will ripple across the economy and ultimately impact most every American.”

Hamberger, and others testifying before the Board, ran through many examples of how earning sufficient revenues has allowed railroads to make massive private investments in rail infrastructure – nearly $29 billion in 2015, and $575 billion since 1980. This is in contrast to other modes of transportation, such as highways, which are funded by taxpayers.

Regulation of railroads’ overall revenue levels would run counter to Congress’s goals in the Staggers Act of 1980 that partially deregulated the freight rail industry to allow railroads to earn sufficient revenue to meet their long-term needs without having to rely on the federal government.

As Dr. Roger Brinner, chief economist with SandPointe, LLC testified, the concept of revenue adequacy should be a goal, and not a directive to constrain revenues; railroads should not be penalized for improved financial performance.

“Now comes a handful of interest groups that want you to cut their transportation costs by direct government intervention at the expense of the greater good. Let’s call it what it is: they want you to institute a regime of wide ranging price controls on freight railroads,” Hamberger testified.

Hamberger outlined the many national goals that would be at risk, should the STB decide to relapse into 1970s-era regulatory policies. Doing so, he noted would undermine the industry’s ability to: continue to improve rail safety, efficiency and reliability; increase U.S. exports; support U.S. energy independence, and effectively provide a healthy rail network relied upon by millions of daily Amtrak and commuter rail passengers.

“Freight rail success today is due to the foresight of the government leaders in 1980 who unleashed the transformational power of the market place through partial deregulation,” Hamberger said. “Subsequent federal involvement in rail economics both in the legislative and regulatory arenas honored the belief that a developed nation requires a top-notch freight rail system and that system is best provided by private companies in control of their resources rather than through the government.” 

Daniel Elliott sworn in as STB chairman


Daniel R. Elliott III was sworn in June 26, 2015, as the Chairman of the Surface Transportation Board (STB), pledging to continue to promote transparency and to improve and streamline regulation of the Nation’s freight railroads.

He was nominated to the STB by President Barack Obama on January 13, 2015 for a four year term expiring Dec. 31, 2018. He was confirmed by the U.S. Senate on June 22, 2015. This is Chairman Elliott’s second term on the STB. He previously served as Chairman of the agency from Aug. 13, 2009 to Dec. 31, 2014.

At his confirmation hearing before the Senate Commerce, Science and Transportation Committee in May 2015, Elliott stated that he would continue the reforms that he had begun during his first term to increase STB transparency and efficiency; to promote a reliable rail network; and to bring more accessibility to the STB’s processes.

“I would like to thank President Obama for honoring me with this second appointment,”Chairman Elliott said. “I am so pleased to return to the STB to continue work to make sure the STB’s processes are fair, efficient and accessible for all stakeholders. I look forward to working with my fellow board members and board staff to continue the progress that we have made.”

Prior to Chairman Elliott’s first term at the STB, he served for 16 years as associate general counsel to the United Transportation Union. Earlier, he practiced at law firms in Washington and Cleveland. He graduated from the University of Michigan with a degree in political science in 1985 and earned a law degree from Ohio State College of Law in 1989.

Senate confirms Daniel Elliott to STB reappointment

Elliott, Dan; Dan Elliott; Elliott; STB; STB Chairman


The Senate on June 22 easily confirmed the nomination of Daniel Elliott for a reappointment on the Surface Transportation Board.

Elliott’s nomination was confirmed by voice vote. During his confirmation hearing, Elliott said he would ensure the board continues “to facilitate the resolution of service issues so that interstate commerce flows as smoothly and efficiently as possible in support of the U.S. economy.”

Elliott was a lawyer with the United Transportation Union. He was the board’s chairman from 2009 until December, when his term expired.

Read more from Transport Topics.

Committee holds hearing on freight rail challenges

capitolU.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, today held his second hearing as chairman entitled, “Freight Rail Transportation: Enhancing Safety, Efficiency, and Commerce.” The hearing focused on challenges facing our nation’s freight rail network created by higher demand, pending and proposed rules and regulations, and infrastructure needs. Today’s hearing continued Thune’s work to improve freight rail service for ag producers and shippers and prevent future rail service disruptions from occurring.

Thune also invited Dave Brown, Chief Operating Officer of Genesee and Wyoming, parent company to South Dakota’s Rapid City, Pierre, and Eastern line (RCP&E), to testify before the hearing. Dave spoke about the opportunities and challenges that RCP&E and other shortline railroads face.

Last Congress, the Commerce Committee held various rail related hearings, including a hearing on the rail service challenges facing shippers across the country, which included agriculture producers in South Dakota who struggled with access to reliable freight rail service during a record harvest. In addition, on September 17, 2014, the Commerce Committee passed the bipartisan Surface Transportation Board (STB) reform bill that Senator Thune and former Commerce Committee Chairman Jay Rockefeller (D-W.V.) introduced to institute common-sense reforms regarding how the STB works and to address rate disputes and service complaints.

“As 2013 and 2014’s freight rail delays and service challenges highlighted, rail service is absolutely critical to our nation’s economy. South Dakota farmers scrambled to find rail cars and watched as rail turn times worsened, delaying shipments and creating grain storage challenges for the record breaking wheat, corn, and soybean crops.

“However, those delays were not just limited to the north central United States, they also extended across the country and impacted every shipping sector and industry.

“Thankfully, this winter’s relatively mild weather and better service have provided some improvements, but there’s still work to be done.

“I am pleased that Genesee and Wyoming, the parent company of South Dakota’s Rapid City, Pierre, and Eastern Railroad (RCP&E) has joined us for today’s hearing. I look forward to hearing from Dave Brown, the Chief Operating Officer of Genesee and Wyoming, which is the largest Class II railroad in the country with over 100 shortline and regional railroads, about the opportunities and challenges the RCP&E and other shortline railroads face.

“From automobiles, to coal, to ethanol, to agriculture, rail service moves goods from farm and factory to consumer marketplaces across the country and across the globe. The U.S. Department of Transportation (DOT) notes that freight rail moves roughly 40 tons per person each year. As a nation, we rely on cost efficient, timely service to move food, consumer products, and energy resources on a daily basis.

“The private infrastructure that makes up our nation’s freight rail system is costly, as old tracks and equipment require ongoing maintenance and investment. Our nation’s railroads continue to invest in new track, sidings, locomotives, and car resources with the goal of serving their customers. Class I railroads and shortlines alike face increasing demands for prompt, reliable, and safe service.

“In 2014 freight traffic increased nearly five percent over 2013 levels, and we should seek solutions that foster an even stronger freight rail network to meet this increasing demand.

“The Federal Railroad Administration (FRA) has proposed or finalized over 15 new freight rail safety rules since the passage of the Rail Safety Improvement Act of 2008, and many of these regulations will take effect in 2015.

“Not only is the Positive Train Control (PTC) mandate looming, with its December 31st deadline, but the DOT has announced that it expects a crude-by-rail regulation to be published around May of this year.

“Although the PTC deadline is quickly approaching, it remains unattainable. Through the end of 2014, railroads have invested over $5 billion in PTC, and they expect to spend billions more in the coming years.

“They have begun installation of the radio towers, locomotive technology, and other PTC infrastructure, but full compliance with the statutory requirements cannot be achieved by the end of this year. The FRA and the Government Accountability Office have documented the immense technical and programmatic challenges with implementing PTC.

“As a result of these challenges, the DOT has reported that the deadline will not be met and has offered a proposal to ensure the benefits of PTC are realized. I look forward to working with my colleagues on a legislative fix to ensure that we can set a more realistic implementation timeline for this important safety improvement.

“I am also closely monitoring the proposed crude-by-rail requirements.

“I have expressed concerns to the Office of Management and Budget as well as the DOT about the unintended harms that could result from the proposed rule. The DOT estimates its proposed crude-by-rail rule could cost nearly $6 billion, and it acknowledges the rule would increase network delays and out-of-service time for rail equipment.

“Without question, we must improve the safety of our nation’s rail system, but I am concerned about the unattainable deadlines the rule proposes. Like the PTC mandate, there are very real impacts when federal agencies set unreasonable and, many times, unachievable deadlines.

“Among other things, the DOT issued this proposed rule without analyzing the potential tank car shop capacity needed to retrofit or replace over 100,000 DOT-111 tank cars. Shippers have raised concerns about a tank car shortage, with a disruption in energy supply transportation, if DOT finalizes this rule with an unattainable deadline. I look forward to working with my colleagues, stakeholders, and the Secretary of Transportation on a realistic timeline for such a phase-out.

“While safety can and should be improved, we certainly do not need to build in system-wide delays and congestion like we have witnessed during the past year and a half.

“Our transportation network connects port to rail to truck. Delays, burdensome regulations, and failing infrastructure disrupt our nation’s economy and cost jobs. So, we must work together to find workable solutions.

“In addition, we must ensure that the Surface Transportation Board, which is tasked with resolving railroad rate and service disputes and reviewing proposed railroad mergers, can provide effective and efficient oversight of the rail industry.

“This committee has a great deal of work to do in addressing freight rail service and safety in addition to passenger rail reauthorizations. I hope members will bring forward thoughtful solutions as we address these challenges.”

Class I workforce notched another gain in November

The U.S. Class I workforce continued to enlarge last month. As of mid-November, the large railroads employed 169,845 people, up 0.4 percent from October’s level and 4.1 percent from November 2013’s mark, according to Surface Transportation Board employment data.

Only the transportation (other than train and engine) workforce sector registered a month-over-month decline, dipping 0.3 percent to 6,699. The other five sectors grew less than 1 percent: transportation (train and engine), 0.5 percent to 71,089; maintenance of equipment and stores, 0.5 percent to 30,476; executives, officials and staff assistants, 0.3 percent to 9,999; professional and administrative, 0.25 percent to 14,249; and maintenance-of-way and structures, 0.15 percent to 37,333.

Read more from Progressive Railroading.

NS to buy part of northeast rail line from CP

ns_LogoCALGARY – Canadian Pacific Railway Ltd. is selling a stretch of track in the northeastern United States to a major U.S. railway in a $217-million deal.

Norfolk Southern plans to acquire nearly 455 kilometres of rail line from Delaware & Hudson, a CP subsidiary, between Sunbury, Pa., and Schenectady, N.Y.

Read the complete story at the Winnipeg Free Press.

Low on coal, utilities ask regulators to prod rails

coal_carWASHINGTON – Ongoing rail service problems have left power plants from Minnesota to Texas low on coal as an early blast of winter weather hit the nation’s midsection this week.

Some fear the stage has been set for a repeat of last winter, when heavy snowfall and subzero temperatures crippled rail operations in the Upper Midwest and Chicago, which had ripple effects across the rest of the country.

Read the complete story at McClatchy Washington Bureau.

Obama to renominate Elliott for STB

whitehouselogoPresident Barack Obama announced his intent Nov. 12 to nominate the following individuals to key Administration posts:

Daniel Elliott III – member, Surface Transportation Board, and upon appointment to be designated chairman;

Lauren McFerran – member, National Labor Relations Board.

“I am confident that these experienced and hardworking individuals will help us tackle the important challenges facing America, and I am grateful for their service,” Obama said. “I look forward to working with them in the months and years ahead.” 

Elliott is a member and the chairman of the Surface Transportation Board, a position he has held since 2009. From 1993 to 2009, he was associate general counsel of the former United Transportation Union, now the SMART Transportation Division. He was an associate at Chester Giltz & Associates from 1991 to 1992, an associate at Marshman, Snyder, Berkley & Kapp from 1990 to 1991, and an associate at Bishop, Cook, Purcell & Reynolds from 1989 to 1990.

He has been an editor for several railway-related publications. He received a B.A. from the University of Michigan and a J.D. from Ohio State College of Law.