Alabama Senator Wants Traffic Study Completed

An Alabama senator wants Amtrak to complete a traffic study before it moves ahead on instituting new service between New Orleans and Mobile, Alabama.

U.S. Sen. Richard Shelby (R-Alabama) outlined his views in letters sent to Amtrak, the U.S. Surface Transportation Board, and host railroads CSX and Norfolk Southern.

Shelby, the vice chairman of the Senate Committee on Appropriations, said a never-completed traffic study needs to be finished in order to alleviate his concerns that the Amtrak service could negatively affect the region’s growth and commerce. 

“I believe that initiating new Gulf Coast passenger-rail service should be guided by the best available data and information,” Shelby wrote.

“As one of the largest growing seaports in the United States, the Port of Mobile serves as an essential economic driver for the state of Alabama and region. As such, prior to establishing passenger-rail service in Mobile, I believe it is essential that a comprehensive analysis be completed that definitively determines the impact such service would have on existing freight rail service and the Port of Mobile. It is my hope that all parties involved can come to an amicable solution to ensure the study is completed.”

Officials at the Port of Mobile have for some time expressed concern that Amtrak operations would adversely affect CSX rail service to the port.

Shelby was apparently prompted to act after Amtrak asked the STB to compel CSX and NS to explain why they could not host the new service.

Amtrak wants to launch the service in 2022 and has said it has a legal right to use the route.

CSX and NS have balked, saying that a study of how Amtrak would affect freight operations of the host railroads needs to be completed before they will discuss what infrastructure improvements need to be made to accommodate passenger service.

Supporters of the service, including the Southern Rail Commission, have $66 million in funding set aside for those infrastructure projects.

 “It is my hope that all parties involved can come to an amicable solution to ensure the study is completed,” Shelby wrote.

Amtrak said it withdrew from the study because it was getting bogged down by changes to its parameters demanded by the host railroads.

AAR Wants Cost-Benefit Analysis in STB Rulmaking

The Association of American Railroads has asked the U.S. Surface Transportation Board to use a cost-benefit analysis procedure whenever it is contemplating making rule changes.

The trade group for Class 1 railroads said that this should “include the “most current and reliable data possible.”

In particular AAR wants the STB to consider a cost-benefit analysis when evaluating the effects of new regulations.

In a news release, the AAR said that current law does not require government regulatory agencies to do a cost-benefit analysis.

However, the trade cross said the STB “would have access to better information and could have substantially greater confidence in critical rulemaking decisions if cost-benefit analyses were performed.”

AAR President and Chief Executive Officer Ian Jefferies said that incorporating a cost-benefit analysis would support the board’s goals, which include facilitating a fluid and reliable rail network.

“By adopting the process improvements sought in our petition, we believe the STB would be better positioned to meet its statutory mandate and bring its practices more in line with the spirit of past executive orders, which the board has largely acknowledged to date,” he said in a statement.

5 Transportation Nominees Resubmitted to Senate

The Trump administration has resubmitted to Congress the names of five people who had been nominated for rail transportation federal leadership posts but whose appointments were not approved by the Senate before the 115^th Congress permanently adjourned.

The nominees include three seats on the Amtrak board of directors, one seat on the Surface Transportation Board and an appointee to head the Federal Transit Administration.

Senate rules require nominations not acted upon during a two-year, congressional session to be returned to the White House for re-submission during the next session of Congress.

Those who have been nominated a second time include:

Rick A. Dearborn to the Amtrak board for a five-year term, succeeding former BNSF attorney Jeffrey R. Moreland, whose term expired, but who is in holdover status.

Joseph Ryan Gruters to the Amtrak board for a five-year term, succeeding Albert DiClemente, whose term expired, but who is in holdover status.

Leon A. Westmoreland to the Amtrak board for a five-year term to fill a vacant seat.

Michelle A. Schultz to be a member of the Surface Transportation Board for a five-year term to fill a still-vacant new seat created in 2015.

Thelma Drake to be Federal Transit Administrator, succeeding Peter M. Rogoff, who resigned in 2015.

All five nominations have already been considered by the applicable Senate oversight committees and all have been recommended for confirmation.

The decision to bring the nominations to the Senate floor for a confirmation vote is at the discretion of Senate Majority Leader Mitch McConnell.

The list of five nominees does not include a Democratic nominee for an STB seat vacated Dec. 31 by Deb Miller, who has been awaiting renomination to a second term for more than a year.

By law Miller must leave the agency following the expiration of her allowable holdover year. Miller is expected to be named by the White House to be re-appointed to the STB.

Senate OKs 2 STB Commissioners

Two appointees to the U.S. Surface Transportation Board were confirmed by the Senate on Wednesday. Approved were Patrick Fuchs and Martin Oberman.

Fuchs has been a senior professional staff member working on surface transportation and maritime issues for the Senate Commerce Committee and also served as a policy analyst and Presidential Management Fellow at the Office of Management and Budget.

He will serve a five-year term as an STB commissioner.

Oberman is the former chairman of Metra and a Chicago attorney. He formerly served as a Chicago alderman.

He joined Metra’s board in September 2013 and was elected chairman in 2014. He held that position until October 2017.

Oberman will serve the remainder of a five-year term that expires Dec. 31, 2023.

CSX Retains Rights on Line it is Selling

CSX plans to continue using a portion of the former route of Amtrak’s Sunset Limited in the Florida Panhandle even though it is selling the track to a short-line railroad.

The Florida Gulf & Atlantic Railroad plans to begin operations on the line between Jacksonville and Pensacola on Jan. 6, 2019.

However, a filing with the U.S. Surface Transportation Board indicates that CSX will retain trackage and haulage rights on the route.

The Sunset Limited operated over the line until August 2005 when portions of its were severely damaged by Hurricane Katrina.

Despite numerous efforts by southern rail passenger agencies, Amtrak has not reinstated service east of New Orleans.

CSX, though, said it has no plans to regularly operate trains on the line and sought the trackage rights as an insurance policy to provide it with operational flexibility.

The FF&A is a subsidiary of RailUSA and is based in Boca Raton, Florida.

CEOs Differ on Merger Benefits

Two Class 1 railroad CEOs last week gave differing views about the prospect of railroad mergers in the future.

Union Pacific CEO Lance Fritz said he views the regulatory risks and obstacles to a Class I merger outweighing any benefits that might accrue from a consolidation.

On the other hand, CSX CEO James Foote said he wants to keep on open mind about mergers.
Fritz explained that he doesn’t see much opportunity in a merger.

Although he said there could be saving from cutting administrative costs and eliminating interchanges and the risk is that the conditions imposed during the regulatory review process might overwhelm those.

He pointed to tougher merger rules that the Surface Transportation Board promulgated in 2001.

Foote, though pointed to how previous mergers resulted in lower costs and improved service. Any future mergers could be expected to delivered similar benefits.

Foote concurred with Fritz that the success of a merger would hinge on whether it still created values once the regulatory review process is completed.

STB Wants Info From NS About PSR Implementation

The U.S. Surface Transportation Board has asked management of Norfolk Southern to brief it in weekly conference calls about the progress it is making toward implementing the precision scheduled railroading operating model.

The STB held similar conference calls with CSX management in 2017 when it encountered service problems after implementing PSR and has asked Union Pacific to provide information about its move toward PSR.

STB Chairman Ann Begeman said in a letter sent to NS that the board has “strong concern about the potential dislocation that can result when a railroad makes wholesale operating changes, particularly railroads that have been confronting prolonged service challenges.”

Begeman said the STB wants to see NS avoid the type of service problems that CSX had.

NS has said it plans to implement PSR principles gradually and work with its customers in the process in order to minimize the potential for disruption.
The PSR plan is not expected to be fully implemented until sometime in 2019.

STB Issues ‘Guidance’ in Metra-Amtrak Dispute

The U.S. Surface Transportation Board has rule that Amtrak must refrain from discriminating against other railroads that share Chicago Union Station.

The STB responded in a case brought by Chicago commuter rail operator Metra, which used the Amtrak-owned depot.

Metra sought a declaratory order that STB oversight extends to CUS, notwithstanding Amtrak’s statutory immunity from federal economic regulation.

The case stems in part from Amtrak’s move in May 2017 to merge CUS into itself without seeking STB approval.

This resulted in Metra fearing that it and other non-Amtrak users of CUS would not no redress in disputes involving Amtrak should it negotiating leverage by restricting access to the terminal.

At the time, Metra and Amtrak were in negotiations over access terms and fees.

In its decision, the STB didn’t rule wholly in Metra’s favor. Instead the Board said Metra could renew its petition at a late date and perhaps prevail.

Because the STB did not issue a declarative order, neither Metra or Amtrak can now seek judicial review.

The STB said it decided to issue guidance to both parties rather than make a ruling because there is no current ripe dispute.

Amtrak was told by the STB to show that the statutory language exempting it from economic regulation “specifically enables it to take actions that cause another regulated carrier’s facilities [CUS] to be removed” from STB jurisdiction without STB review or approval.

Metra for its part has argued that that Amtrak’s motivation when it absorbed CUS, which historically has been considered a common carrier subject to regulatory oversight.

The STB told Metra it must show that prior to its merger with Amtrak that CUS was a rail carrier subject to STB jurisdiction.

STB Nominees Seek to be Neutral at Hearing

The two nominees for seats on the U.S. Surface Transportation Board appeared before the Senate Commerce Committee this week and sought to deflect pointed questions they were asked about STB policies.

Patrick J. Fuchs, a former Commerce Committee staff member, and Michelle A. Schultz, deputy general counsel for the Southeast Pennsylvania Transportation Authority, are Republicans who recently were nominated to STB seats by the Trump administration .

Among the questions was one by Roger Wicker (R-Mississippi) about Amtrak’s statutory right of preference over freight traffic.

“The law says Amtrak has preference over freight transportation using a rail line. You talked about statutory directives. Do you agree [preference] is a statutory directive?” Wicker asked. “In reality freight railroads have consistently denied such preference to Amtrak.”

Noting that a federal appellate court has struck down one effort to regulate on-time performance, Fuchs said, “Reasonable terms and conditions are case-specific, dependent on a particular route. “I would be hesitant to make a sweeping statement. I would evaluate any case that came before the board from a fair and open perspective.”

Both nominees in their prepared statements and in answers to questions sought to paint themselves as neutral and impartial.

“I believe both in the importance of the board’s responsibilities and in the power of market forces to achieve efficiencies and drive innovation and investment,” Fuchs said in his statement.

For her part, Shultz said that “because freight rail and intercity passenger rail serve an integral role in enhancing mobility within the United States, it is incumbent upon the Board to approach matters . . . in an impartial manner within the bounds of its jurisdiction and the law.”

Metra Takes CUS Dispute to STB

Metra is at odds with Amtrak over its lease and trackage rights at Chicago Union Station and has asked the U.S. Surface Transportation board to referee the dispute.

At issue is Metra’s contention that by merging the Chicago Union Station Company into Amtrak that that would allow Amtrak to evade federal law and STB oversight.

Until the merger last year, the CUS company had been an Amtrak subsidiary and Metra’s nominal landlord.

In its STB filing, Metra described the merger as “a corporate maneuver to evade the Board’s commuter rail service-protective mechanisms [that] would be counter to Congressional intent and public policy and an abdication of the board’s responsibilities.”

Metra wants the STB to rule the STB under federal law still has jurisdiction over the station, as had been the case under the lease with the station company, and that it has authority to prescribe terms for Metra’s use of the station.

Such a declaration would enable the STB to mediate an impasse between Metra and Amtrak over a new lease.

By law, Amtrak is exempt from most STB economic regulation, but the station company is not.

Metra’s lease at CUS will expire on April 30. A Metra spokesman said the commuter rail agency will pay $9.7 million under its lease this year.

An Amtrak spokesman declined to comment on the STB filing by Metra.

Although CUS is not the only facility used by Metra in downtown Chicago, it accounts for 41 percent of its passengers traveling to downtown, handling an average of 109,520 passengers on 286 weekly Metra trains on six routes.

Metra is worried that Amtrak might contend that the merger has removed Union Station from the reach of federal law and therefore deprive Metra of alternative paths to preserve access to the the station “should it ever come to that.”

In a letter to Metra written last January, Amtrak contended that the federal law cited by Metra no longer is application to CUS because of the merger.

Amtrak acknowledged that it remains “responsible for the facilities and obligations of [the station company] that existed at the time of the merger.”

In its STB filing, Metra cited that letter in saying, “There plainly is disagreement (and therefore a controversy) between Metra and Amtrak over whether the properties formerly owned by [the CUS company] are subject to the commuter rail protections of Sections 11102 and 28502 [of the Chapter 40 of the U.S. Code].”

Metra also contended that the issue could have implications for commuter rail agencies using Washington Union Station.

That would include Virginia Railway Express and MARC Commuter Train Service.