WASHINGTON — The Surface Transportation Board will allow a Minnesota company to proceed with its complaint against Union Pacific that alleges service reductions by the railroad violate UP’s common carrier obligation and constitute unreasonable practices.
In a decision issued Tuesday, the board granted a request by Sanimax USA to partially revoke commodity exemptions and allow the case to move forward, while denying UP’s motion to dismiss the Sanimax complaint.
Sanimax, in South St. Paul, Minn., processes animal waste for use in animal feed, pet food, soap, and other products. In August 2020, UP reduced service to Sanimax’s plant from five days a week to three; the company said it spent almost $14,000 to move products by truck in the first month of the reduced service and has been assessed more than $8,500 in demurrage charges as a result of the decrease.
Sanimax filed a complaint with the STB over the reduction of service in November 2020; later that same month, UP field a motion to dismiss on the grounds that the commodities in question are exempt from STB regulation. Sanimax responded with a request for the board to grant a partial revocation of those commodity exemptions.
In Tuesday’s decision, the board determined the revocation was necessary. “Given the nature of the service dispute at issue here and the issues raised regarding Sanimax’s dependence on UP’s service,” the board wrote, “ it is important that the Board examine Sanimax’s claims and UP’s responses to determine if regulatory relief is appropriate in order to provide the balanced regulatory process envisioned in the Staggers Rail Act.” The board also set a procedural schedule that will have all submissions in its possession by April 18, 2022.
Although more expensive, it’s so much easier to deal with trucking companies. Railroads only want to deal with what they view as the cream of the business. Too, what are railroads in business for? To turn away opportunities. They did the same thing to the passenger and express business and we see how that turned out. The UP should be discounting rates under PSR and improving service,but all they do is line their pockets.
One of the main themes in relationship mediation is:
“There’s two sides to every story, probably three” Perhaps this parable is in play here.
Amazing that “common carrier” issues come up with the UP. Metra wants to use it. A shipper is trying to use it. The Feds ought to be able to figure it out quickly as they use the UP as a contractor. ie UP vax mandate articles
UP is basically saying that Sanimax has to build a bigger siding if they want service. If they only have a 5 car siding and it can’t hold a daily load and they have to use trucks, then the siding is too small relative to what UP is willing to provide.
It’s really about who drives the service, the customer or the provider. If the customer needs 5 day service every week, the UP should be charging for it. (It appears UP simply drag the extras over to another yard and rack up demurrage instead)
If UP is unable to charge Sanimax due to a regulatory issue, then UP will need to make their case to the STB.
Why are railroads driving business AWAY?? I just do not understand.
I thought railroads were striving to increase their freight traffic base, not reduce it. The nineteenth century term still applies: “clothed with a public interest.”
Now that’s customer service. Looks like UP doesn’t want to be “Pulling For You” or anyone. That is unless they don’t have to switch the customer. This is exactly why the railroads have and will continue to lose traffic to the highway.
I was wondering when the first complaint on PSR driven service reductions for a small shipper would be taken up by the board. The majority of previous service disputes were brought by large shippers or shipper groups. It will be interesting to see how this plays out. Perhaps this will be a David versus Goliath watershed moment.