CHICAGO – The Chicago interchange dispute between Canadian National and Canadian Pacific is heading to a new venue: Federal court.
CN, through its Wisconsin Central subsidiary, is seeking to have the U.S. Seventh Circuit Court of Appeals set aside a Surface Transportation Board declaratory order.
The STB’s order, issued in October, said that CN could not unilaterally designate the Belt Railway of Chicago’s Clearing Yard as the location at which it will receive interchange traffic from Canadian Pacific’s Soo Line subsidiary.
CN is challenging that order, saying that the board’s interpretation of the Interstate Commerce Act was incorrect. CN is asking the court to set aside the STB’s declaratory order and grant further, unspecified relief.
The railway’s suit against the STB, which was filed on Dec. 23, was revealed in a regulatory filing posted on the board’s website on Thursday.
CN in April had asked the board to wade into its long-running dispute with CP over where the railroads may interchange in Chicago and who should pick up the tab for interchange costs.
Both railroads continue to exchange cars at Clearing Yard, as they have under an August 2019 interim agreement that shifted the interchange location from Spaulding in Bartlett, Ill.
The board’s October decision said CN could not declare that Clearing was the point where it would accept inbound CP interchange traffic. As a result, the board said there was no need for it to determine whether or how the railroads should share the costs of interchange moves.
CN had sought a board order that would clarify whether each railroad should bear its own interchange costs, including fees for the Belt Railway’s switching services.
In its decision, the STB emphasized the importance of the Chicago gateway to the nation’s rail network and pointed out that CN had argued that Clearing is an efficient and central location for the two railroads to interchange.
“If switching at Clearing Yard benefits the movement of rail cars in the Chicago area, then the Board would encourage CN and CP to reach a mutually beneficial agreement to interchange there,” the STB wrote in its decision.
CN and CP began discussing an interchange move in 2018. Talks failed, however, and CN aimed to cancel the current interchange agreement on May 11, 2019, then move the interchange from Spaulding, not far from CP’s Bensenville Yard, to CN’s Kirk Yard in Gary, Ind. [See “Canadian Pacific, Canadian National locked in Chicago interchange dispute,” Trains News Wire, May 2, 2019].
CP objected, and the board ordered the railways to maintain the Spaulding interchange while the dispute headed to mediation. Mediation failed to resolve the dispute, however, so the STB ordered the railroads to appear before the board. [See “CN, CP to argue Chicago interchange dispute before federal regulators,” News Wire, July 22, 2019]
CN and CP reached an interim interchange agreement while they awaited a formal STB decision. Under the terms of the interim deal, CN delivers CP-bound interchange traffic to Bensenville Yard, while CP delivers CN-bound traffic to CN via Clearing Yard [see “CN, CP interchange dispute in Chicago drags on,” News Wire, June 1, 2020].
The railroads exchanged an average of 83 cars per day in Chicago in 2019. CN says interchange at Spaulding tied up its increasingly busy single-track Chicago-Winnipeg main line.
