STB moves ahead with small shipper’s common carrier complaint against Union Pacific

WASHINGTON – The Surface Transportation Board has denied Union Pacific’s request to dismiss a common-carrier case filed by a small shipper in the Twin Cities.

In a 3-2 decision issued Thursday, the STB also ordered the shipper, Sanimax, to provide evidence for damages allegedly incurred when UP unilaterally curtailed local service to three days per week, down from five, in August 2020. That evidence is due by Dec. 18, while UP has until Jan. 17 to respond to Sanimax’s request for damages.

Two board members, Patrick Fuchs and Michelle Schulz, dissented, noting that Sanimax should have already sought and presented damages evidence. Schultz also argues that Sanimax’s claim is moot since UP in May 2022 restored Sanimax’s switching service to five days per week.

Sanimax brought the case to the STB in November 2020. It asked the board to order UP to restore service to five days per week at its rendering facility in South St. Paul, Minn.

UP subsequently sought to have the case tossed out, arguing that the animal byproducts that Sanimax ships are exempt from regulation. But the STB in November 2021 revoked the exemption and allowed the case to proceed, saying the “issues raised by Sanimax … warrant closer examination and further development of the record.”

The case could set a precedent because common-carrier rules — which require railroads to provide service upon reasonable request — are ill-defined.

Sanimax contends that UP failed to meet its common-carrier obligations by reducing service to three days per week and subsequently failing to supply railcars on scheduled service days, providing late service, and placing railcars on the incorrect tracks at Sanimax’s facility.

UP warned the STB that a decision prioritizing Sanimax over the needs of higher-volume customers would micromanage operational decisions “by regulatory fiat,” reduce network efficiency, and further stress the supply chain.

UP says the case should be moot because it continues to provide Sanimax with five days of service per week.

In a June update to the STB, UP said it was continuing to provide Sanimax with five days of service. In its June update, Sanimax claimed that UP’s service frequency had fallen short of the railroad’s commitments.

The STB’s decision yesterday said the case was not moot. “UP’s commitment to provide five-days-per-week service was for a finite and relatively short period of time, after which UP could decide to revert to the same practices that prompted Sanimax’s complaint,” the decision says. “Moreover, in its June 7, 2023, report, UP itself stated that it had not made any further commitments regarding service frequency. Accordingly, the Board finds that Sanimax’s injunctive relief claim is not moot.”

The STB also is considering a common-carrier complaint involving a Powder River Basin coal shipper and BNSF Railway.

In April, Navajo Transitional Energy Co. said BNSF Railway violated its common-carrier obligations by failing to provide adequate service from the Spring Creek Mine in Montana to the Westshore Terminals at Roberts Bank in Delta, British Columbia, Canada.

In a 3-2 decision in May, the STB ordered BNSF to handle 23 trains per month from Spring Creek Mine to the Westshore Terminal – and an additional six trains per month once there is sufficient crew and train set capacity.

BNSF challenged in federal court some elements of the STB’s decision and also asked the board for a partial stay of the order while a judicial review is under way. The railroad said it did not object to the 23 trains per month or 4.2 million annual tons quota, but it did take issue with the requirement to handle an additional six NTEC trains per month. And so the railroad asked the STB to put a stay on the requirement to handle an additional million tons this year.

The STB rejected BNSF’s request for a partial stay.