Gulf Coast Case Settlement Reported

Amtrak, CSX and Norfolk Southern told the U.S. Surface Transportation Board last week that they have reached an agreement that would allow new passenger service between New Orleans and Mobile, Alabama.

The announcement came in the form of a motion asking the STB to hold in abeyance hearings regulators had set for Nov. 30 and Dec. 1 in the case.

Amtrak brought the case in 2021 when it asked the STB to order NS and CSX to host the proposed double-daily service.

The host railroads had demanded infrastructure improvements that Amtrak considers excessive. Hearings were held earlier this year.

Also a party to the case is the Port of Mobile, which has expressed concern that the proposed Amtrak service would interfere with freight rail operations to the port.

Thus far the terms of the agreement have not yet been revealed nor has a date been set for when the service would commence.

The filing with the STB said, “The Parties have agreed to settlement terms that, when fully implemented, will lead to a complete resolution of this proceeding.”

The parties said they considered the settlement to be confidential and they would not comment upon it for the time being.

Earlier attempts to resolve the case through mediation had failed.

STB Delays Gulf Coast Case Final Hearings

The U.S. Surface Transportation Board has agreed to postpone final hearings in the Gulf Coast case.

Regulators acted after the parties to the case told the Board there was a “substantial probability” of reaching a settlement through arbitration.

The case was brought by Amtrak against CSX and Norfolk Southern in an effort to obtain an STB order directing those railroads to host double-daily new passenger service between New Orleans and Mobile, Alabama.

The sticking point has been infrastructure improvements the host railroads have demanded that Amtrak has described as exorbitant and unneeded.

The case has focused on whether the addition of passenger service would unduly interfere with the host railroads freight operations.

The STB had been scheduled to conduct hearings late this month and to hold a conference in early December with the goal of reaching a decision in the case.

Instead, regulators directed the parties in the case, which also includes the Alabama State Port Authority, to provide a status report by Nov. 21 on their negotiations.

If a settlement is not reached, the STB said it would conduct hearings via Zoom on Nov. 30 and Dec. 1, and hold a conference on Dec. 7.

The parties in the case said if a final hearing is held they do not plan to call witnesses but instead will make their final arguments.

Platform Work Begins on Gulf Coast Route

Although Amtrak service may still be years away, officials held a ground-breaking ceremony in Bay St. Louis, Mississippi, last week to mark the “reactivation” of the city’s passenger station.

Amtrak’s Sunset Limited once stopped here, but that service ended in August 2005 in wake of Hurricane Katrina.

Amtrak has proposed establishing double daily service between New Orleans and Mobile, Alabama, that would serve Bay St. Louis.

The start of that service is uncertain because the passenger carrier is locked in a dispute with host railroads CSX and Norfolk Southern over infrastructure improvements needed to host passenger service.

The dispute is currently before the U.S. Surface Transportation Board.

In a news release, the Southern Rail Commission said renovation of the Bay St. Louis station will begin soon so that it will be ready for the launch of the Gulf Coast service.

Boarding platforms in Gulfport, Biloxi and Pascagoula also need to be renovated.

“We are doing the platforms that are essential to properly serving our customers all the way across the Gulf Coast,” said Marc Magliari, an Amtrak media relations manager.

Amtrak is paying for the platform renovations. Magliari predicted that the Gulf Coast service would begin around the first of next year.

“We’ve been very public with our position that the Gulf Coast needs this service, the Gulf Coast deserves this service,” Magliari said. “This service is very possible; all we have to do is get some working agreements with the folks that own the tracks.”

STB Orders Mediation in Gulf Coast Case

The U.S. Surface Transportation Board has ordered that the parties to a dispute over proposed Amtrak service along the Gulf Coast participate in mediation that would be sponsored by the Board.

The order by federal regulators also ordered CSX and Norfolk Southern to provide access to Amtrak representatives to information the two railroads consider to be confidential.

It is the latest development in a case that is more than a year old in which Amtrak has asked federal regulators to order the two Class 1 railroads to host new service Amtrak wants to launch between New Orleans and Mobile, Alabama.

That service has been proposed for years and funding is in place for it, but the freight carriers have been demanding infrastructure improvements that Amtrak contends are unnecessary.

Regulators held public hearings earlier this year and the various parties have been waging a war of filings with the STB.

The confidential information at issue are the results of rail traffic controller studies conducted in 2020 and 2021.

Amtrak wants access to materials created during those studies to it can, in its view, better respond to evidence introduced by CSX and NS during the proceedings as to the effects that introduction of intercity passenger service would have on their freight operations.

STB members raised questions about some of that evidence during the hearings.

Amtrak Rejects Gulf Coast Case Mediation

Amtrak has opposed a request by CSX and Norfolk Southern that the Gulf Coast case be settled through mediation.

The passenger carrier called mediation yet another delaying tactic by the host railroads.

CSX and NS recently asked the U.S. Surface Transportation Board to order mediation in the case, which Amtrak brought in March 2021 in an effort to force the host railroads to allow new intercity rail passenger service between New Orleans and Mobile, Alabama.

Amtrak asked the STB to delay any action on mediation until after the Board conducts an evidentiary hearing in early April.

In a filing dated March 28, Amtrak said it agreed with CSX and NS that “an amicable resolution of this matter may be possible,” but the move to mediation is “yet another attempt to further delay a process that has already been delayed far too long.

“At the very least the motion is premature in as much as it presumes that the building of infrastructure is necessary for Amtrak to resume the Gulf Coast service, and therefore necessary for the parties to negotiate over.”

The evidentiary hearing has been set for April 4-5.

NS, CSX Seek Mediation in Gulf Coast Case

The Gulf Coast Amtrak service dispute may be headed to mediation.

CSX and Norfolk Southern want the U.S. Surface Transportation Board to appoint a mediator to help them resolve their dispute with Amtrak over the latter’s efforts to start passenger service between New Orleans and Mobile, Alabama.

Amtrak more than a year ago brought a case before the STB seeking an order forcing the would-be host railroads to allow the service to begin.

The parties have been at odds over the level of infrastructure improvements that are needed to the route to accommodate passenger service.

Regulators held public hearings in February and are set to conduct an evidentiary hearing in early April.

If the STB appoints a mediator, all parties would have to accept whatever resolution of the dispute the mediator enables the parties to reach.

STB Sets Agenda for Gulf Coast Hearings

Federal regulators have issued an order to the parties involved in the Gulf Coast passenger case to be prepared to address certain specific issues during public hearings that begin on April 4.

U.S. Surface Transportation  Board Chairman Martin J. Oberman laid out those issues in a letter sent to the direct parties in the case, Amtrak, CSX, Norfolk Southern, and the Alabama State Port Authority.

Amtrak is seeking an STB order to CSX and Norfolk Southern allowing it to use their track for proposed new passenger service between New Orleans and Mobile, Alabama.

The port authority was allowed to intervene in the case after it contended that Amtrak operations could hinder freight service to the Port of Mobile.

In part, the STB wants the parties to address the operation of drawbridges on the mostly CSX route, which has not hosted Amtrak since August 2005.

Operation of bridges has become an issue because CSX contends that a traffic modeling study it conducted shows the bridges must be opened upon demand and that would affect rail traffic on the route.

The STB has also asked the parties to address how Amtrak’s existing operating agreements with CSX and NS apply to the Gulf Coast dispute, what steps have been taken pursuant to those agreements, and any additional steps under those agreements that are considered for implementation by the parties.

Although Amtrak submitted as evidence those operating agreements, they are not part of the record in the case that is open to public view.

Regulators also have asked the parties to address whether they can “prescribe reasonable terms and compensation” if they determine that Amtrak operations would impose unreasonable burdens on freight operations.

A similar question the Board asked is whether it can order a host railroad to allow Amtrak operations subject to the construction of additional infrastructure as determined by regulators and can regulators determine which party must pay for such work.

The STB order can be found at https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1647268205256/51157.pdf

STB Sets New Dates for Gulf Coast Case Hearings

The evidentiary hearing for the Amtrak Gulf Coast case has been reset for April 4-5.

The U.S. Surface Transportation Board had been scheduled to conduct the hearings March 9-10 but moved them back nearly a month at the request of CSX, one of the direct parties in the case.

Amtrak is seeking an STB order forcing CSX and Norfolk Southern to host proposed double-daily new service between New Orleans and Mobile, Alabama.

The STB said the evidentiary hearings should take no more than two days but it also has reserved April 6 and 8 if additional time is needed.

The Board conducted two days of public hearings in the case in February, hearing 10 hours of testimony from 60 witnesses.

Continuance Sought in Gulf Coast Case

CSX and Amtrak have found something upon which they can agree in the Gulf Coast service case.

Both want the U.S. Surface Transportation Board to delay the next round of hearings in the case until April.

The freight carrier filed a motion with the Board on Wednesday asking regulators to delay the evidentiary hearings from March 9 to April 5 with the next two days set aside if needed.

The motion said that Amtrak, the Port of Mobile and Norfolk Southern do not oppose the request.

All four are direct parties to a case brought by Amtrak in March 2021 asking the STB to order CSX and NS to host proposed double-daily passenger service between New Orleans and Mobile, Alabama.

The STB held two days of public hearings earlier this month at which 60 witnesses provided 10 hours of testimony.

The motion said the parties did not want the evidentiary hearings delayed beyond the first full week of April.

A report on the website of Railway Age said that unnamed industry observers believe the request for a continuance of the hearings may indicate that CSX and Amtrak might be willing to resume negotiations over the service in an effort to come to an agreement without the involvement of federal regulators.

A major sticking point in the Mobile service proposal has been the level of capital investment that is needed on the route.

CSX and NS have demanded what Amtrak and its allies view as exorbitant and unneeded infrastructure improvements to the largely single-track line.

Amtrak has said it is willing to fund some infrastructure work, but not as much as what the host railroads are demanding.

CSX, STB Members Spar Over Capacity Projects

The public hearings in the Gulf Coast passenger case continued on Wednesday with some members of the U.S. Surface Transportation Board critical of host railroad CSX’s objections to the service.

STB Chairman Martin Oberman pointed to evidence that CSX uses its mainline at Gentilly Yard near New Orleans to assemble trains, which has resulted in multiple hours of delay.

Oberman wondered why CSX has spent more than $30 billion on paying stock dividends and buying back shares of its stock, but hasn’t invested in expanding Gentilly Yard or resolving infrastructure issues on the route that Amtrak wants to use between New Orleans and Mobile, Alabama.

“You’ve spent $6 billion less on capital than stock buybacks over the past 11 years,” Oberman said.

Those comments came during an exchange with CSX CEO James Foote, who insisted that his railroad is not opposed to Amtrak service along the Gulf Coast but wants Amtrak to pay for capacity upgrades.

Various reports have put those capacity improvements at $440 million.

Foote argued that without those improvements CSX freight operations would suffer.

CSX said the route between New Orleans and Mobile, over which Amtrak wants to operate double-daily service, is single track and has limited passing siding capacity.

Oberman at one point suggested that the lack of capital investment by CSX on the route was causing delays to CSX service even without Amtrak operating there.

In response, Foote said the COVID-19 pandemic had upended CSX operations for the past two years and that the Class 1 railroad spends $2 billion annually on capital spending for infrastructure improvements of its system.

Yet some STB members seemed unconvinced by that, saying the capacity issues on the route existed long before the pandemic.

“I’m a little disappointed by the response,” said STB Vice Chairman Robert E. Primus. “I want direct answers, and I don’t think we’ve got them.”

During his appearance, Foote sought to frame the issue as one in which an Amtrak victory in the case would negatively affect the national freight network.

Oberman said the Board will consider whether CSX is seeking to force the expenditure of public funding on overdue infrastructure improvements that that railroad has failed to make.

STB member Karen Hedlund said CSX needs to present information next month during an evidentiary hearing about “the additional benefits to the fluidity of your system from the improvements you are requesting that be made on behalf of Amtrak.”

Oberman suggested CSX could make operational changes to address the capacity issues, including running shorter freight trains that would fit into the existing sidings.

The Wednesday hearings also featured former NS and Amtrak CEO Charles “Wick” Moorman, who said he wasn’t taking sides in the dispute but said that during his time at NS and Amtrak the two were able to work out mutually beneficially plans that enabled the launch of new Amtrak service in Virginia and North Carolina.

Noting that one of the sticking points in the case is how Amtrak service might adversely affect the Port of Mobile, Moorman said NS faced the same issue regarding rail service at the Port of Norfolk when Amtrak wanted to begin service to Norfolk, Virginia.

“We had similar concerns at NS, but we worked with Amtrak to resolve them,” he said. 

Moorman expressed confidence that the STB would be able to mediate a compromise between the various parties on the infrastructure matters.

He also said that during his time at Amtrak that CSX claimed $2.4 billion in infrastructure improvements were needed to make the Gulf Coast route suitable for passenger service between New Orleans and Jacksonville, Florida. “I say this with all due respect to my CSX friends — that was laughable,” Moorman said.

Although Moorman said he didn’t know how much needs to be spent on infrastructure work on the New Orleans-Mobile route, he said there is a “process and tools” to decide what is necessary.

Amtrak President Stephen Gardner took issue with CSX’s assertions of how much infrastructure is needed to the New Orleans-Mobile route.

Amtrak’s position is that it could implement the service without any capacity improvements and that that would not result in “unreasonable impairment” to either CSX or NS freight service.

He cited studies concluding that in that scenario the presence of Amtrak trains would cause average freight train speeds to decrease by just seven-tenths of a mile per hour. 

Gardner said it was not Amtrak’s responsibility to pay for what he termed, “the gold-platting of freight railroad lines in order for them to live up to their legal obligations to Amtrak.”

The latter comment was a reference to an Amtrak assertion in the case that the law creating Amtrak in the early 1970s gives the passenger carrier a right of access to any rail line in the country.

Federal Railroad Administration head Amit Bose generally sided with Amtrak on that point during his testimony but also reminded regulators that more was at stake than service between New Orleans and Mobile.

“The board’s decision here will have impacts that reach far beyond the Gulf Coast,” Bose said. “The outcome of this case will have impacts on the future of passenger rail all across the country.” 

Echoing that point were various speakers from communities outside the Gulf Coast who hope to see new Amtrak service come to their communities.

The perception of Bose and those witnesses is that if regulators side with CSX on the issue of Amtrak’s obligation to pay for infrastructure work that will effectively limit rail passenger service expansion in other areas.

The STB will hold another public hearing on March 9 at which time the direct parties to the case – Amtrak, NS, CSX and the Port of Mobile – will present evidence to support their positions.

For more on the STB hearings visit https://railfan.com/csx-amtrak-butt-heads-on-gulf-coast-service-before-stb/ or https://www.trains.com/trn/news-reviews/news-wire/moorman-csx-and-amtrak-weigh-in-on-second-day-of-stb-hearing-analysis/