The Board Finds that CN Cannot Unilaterally Designate the Belt Railway of Chicago’s Clearing Yard as the Interchange Point for Inbound CP Traffic

On October 30, 2020, the Surface Transportation Board (the Board or STB) issued a declaratory order finding that Wisconsin Central, Ltd. d/b/a Canadian National (CN) cannot unilaterally designate the Belt Railway of Chicago’s (“BRC”) Clearing Yard as the interchange point for inbound Soo Line Railroad Company d/b/a Canadian Pacific (CP) traffic.  Wisconsin Central, Ltd.—Pet. for Declaratory Order—Interchange with Soo Line R.R. Co., FD 36397 (STB served Oct. 30, 2020). 

CN had filed a petition for declaratory order on April 14, 2020, arising from a disagreement with CP regarding interchange operations in the Chicago area between the two carriers.  Id., slip op. at 1.  CN asked the Board to decide whether it has the right to designate Clearing Yard as the point at which CN will receive interchange traffic from CP, and whether each railroad must bear its own costs for the interchange of that traffic, including BRC’s fees for switching services.  Id.  CN urged the Board to answer “yes” to both inquiries.  Id.

CP filed a reply on May 29, 2020, “argu[ing] that the Board should not initiate a declaratory order proceeding because there is no threatened disruption to rail operations, the parties agreed to interchange at Clearing Yard on a temporary basis, and this matter is a business dispute between CN and CP that does not require the Board’s involvement.”  Id., slip op. at 3.

The Board received additional filings from CN and CP, as well as multiple letters from third parties.  Id.  In the October 30, 2020 decision, the Board first addressed CN’s question regarding whether CN has the right to designate Clearing Yard as the point where it will receive interchange traffic from CP.  Under 49 U.S.C. § 10742, a rail carrier must “provide reasonable, proper, and equal facilities that are within its power to provide for the interchange of traffic between . . . its respective line and a connecting line of another rail carrier.”  Id., slip op. at 4.  The Board and its predecessor have long recognized that, although the preferred point of interchange is typically the intersection of the two carriers’ lines, practical considerations may dictate otherwise.  Id., slip op. at 5.  The Board has also long recognized that the right and obligation of the receiving carrier to designate an interchange point depends on whether the receiving carrier and the delivering carrier physically intersect.  Id.  If the carriers do not physically intersect, the receiving carrier does not have the right or the obligation to designate an interchange point.  Id.

The Board concluded that, in the absence of a physical interchange, there was nothing for the Board to decide regarding how cars should be exchanged between CN and CP under § 10742.  Id., slip op. at 9.  Since a receiving carrier does not have an obligation under § 10742 to provide interchange facilities in the absence of a physical intersection, “it follows that there is no corresponding right to unilaterally designate any interchange location with non-intersecting carriers.”  Id.  Accordingly, the Board found that CN cannot unilaterally designate Clearing Yard as an interchange point between CN and CP.  The Board concluded that it did not need to decide whether each railroad must bear its own costs for interchanging traffic at Clearing Yard.  Id., slip op. at 10.

On January 7, 2021, the Board issued a decision stating that a court action was instituted on December 23, 2020 in the United States Court of Appeals for the Seventh Circuit, seeking judicial review of the Board’s decision in this proceeding.  Wisconsin Central, Ltd.—Pet. for Declaratory Order—Interchange with Soo Line R.R. Co., FD 36397 (STB served Jan. 7, 2021).

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