Tuesday, September 20, 2011

Canexus Says STB Mediation Failed

The Surface Transportation Board yesterday published an Expedited Consideration Request filed by Canexus Chemicals in their TIH rate dispute with BNSF Railway and UP. As I reported in June Canexus had accepted mediation in their dispute, but now report that the mediation effort has not produced any results in resolving the disagreements over the terms of TIH shipments.

Canexus vs BNSF-UP is just one of the disputes currently before the STB asking for a resolution of the inherent conflicts between shippers and carriers when it comes to the shipment of toxic inhalation chemicals via rail. In general, the STB has come down on the side of shippers, requiring railroads to perform their common carrier obligation to ship properly presented shipments.

The case of Canexus vs BNSF-UP is a bit more complicated in that two railroads are involved and it is as much a dispute between them as to which will be forced to provide service over the longest distance for the chlorine shipments from Canexus. At stake is the liability for potential releases enroute and possibly the cost of installing and maintaining a PTC system on portions of lines between the various transfer points.

As I pointed out in my June blog on this topic the STB may be able to narrowly resolve these individual issues (and this will be one of the more complicated ones that they have been called upon to resolve) but real resolution of the more general issues will have to be resolved by legislation and regulation.

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