CHICAGO – Canadian National has asked a federal court to set aside a U.S. Surface Transportation Board decision that has stymied CN’s acquisition of CSX Transportation’s Massena Line linking Montreal with Syracuse, N.Y.
CN subsidiary Bessemer & Lake Erie filed the suit last week in the U.S. Court of Appeals for the Seventh Circuit.
The STB last year approved CSX’s sale of 263.3 miles of trackage in New York to CN’s B&LE. But it asked the railroads to remove a condition in the purchase and sale agreement that would forever bar CN from seeking to interchange with short lines Finger Lakes Railway and New York, Susquehanna & Western in the Syracuse area.
CN and CSX were unable to come to terms and asked the board to reconsider its decision. The board refused, leaving the line sale in limbo since its Feb. 24 decision.
CN argues that the board is required to approve a line sale unless the competitive harm of the transaction outweighs its benefits.
I echo Mr. Stansy’s comments. If I were CN’s legal team, I wouldn’t want to irritate the STB at this moment, considering most people think their offer to buy KCS is stickier, competition-wise. Very ill-timed.
CN isn’t helping their case with the KCS sale then. Talk about shooting your self in the foot…
Remember, NYSW is cleared for doublestacks. Back several decades ago NYSW was taking doublestacks down to, if I recall correctly, Little Ferry for Conrail because the Conrail routes had clearance issues at that time.
Ergo, if CN can interchange with NYSW at Syracuse, it could negotiate haulage or trackage or even purchase NYSW and get its own route directly to the greater NU area. Stacks from both Halifax and Port St John could take CN all the way to NY in that case.
CSX does not want that competition ever.
By asking for the provision to be removed, isn’t the STB saying the competitive harm outweighs the benefits?
I think CN is really stretching things here…there’s nothing that requires the STB to approve a line sale(other than follow the rules set out for them by Congress and themselves). I think the real problem is CSX in this case…not sure what they’re so worried about that they have to include a permanent ban on CN interchanging with Finger Lakes and NYSW.