WASHINGTON — Sanimax and Union Pacific have reached a settlement that ends the common-carrier complaint that the Minnesota shipper had filed in 2020 after UP unilaterally reduced the frequency of local service to the Sanimax facility in South St. Paul.
Sanimax and UP today told the Surface Transportation Board that they had agreed to a confidential settlement on Friday. They asked the STB to dismiss the case and said Sanimax had agreed not to bring the matter back to the board.
Sanimax brought the case to the STB in November 2020, after UP reduced local service to three days per week. The company asked the board to order UP to restore service to five days per week at its rendering facility in South St. Paul.
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 have set a precedent because common-carrier rules – which require railroads to provide service upon reasonable request – are ill-defined.
Sanimax argued 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.
In a June 2023 update, UP told the STB the case should be moot because it continues to provide Sanimax with five days of service per week. In its June update, Sanimax claimed that UP’s service frequency had fallen short of the railroad’s commitments.
The other common-carrier case before the board was settled late last year. In November 2023, BNSF Railway and Navajo Transitional Energy Co. reached a settlement that they said would resolve the coal miner’s common carrier complaint against the railroad. In an April 2023 complaint to federal regulators, NTEC claimed that BNSF violated its common carrier obligations by failing to provide adequate service for its Powder River Basin export coal trains.
Here we go another confidential agreement? Of course UP does not want other shippers and receivers to know what the final agreement calls for.
UP as well did not want a STB decision that would have been made aware to all customers.