Do railroads have an obligation to provide rail service?
Example: If a company is located on a branch line (or even on a spur of a main line served by only one RR) and has been shipping product by rail for many years, does the railroad have an obligation to continue to serve that company under any of the following scenarios:
a) it isn’t economically feasible for the railroad to do so.
b) servicing the company is time consuming, utilizing resources that are better used elsewhere.
c) the company has no other viable transportation options available and the removal of rail service will require the company to close or to move.
d) the company does have other viable transportation options available although at a higher cost.
e) the cost of performing track repairs is prohibitive in comparison to the amount of traffic.
What’s I’ve seen happen here in Florida is that there are small or mid sized industries that have been served by rail for 40 or 50 years by ACL, SAL and later SCL. Fast forward into the 1990s and now with CSX owning the tracks. CSX’s position is that these industries don’t generate enough traffic to justify service. So then these businesses file lawsuits and fight to keep the service.
I read that Conrail encountered similar sitations in the early 1980s.
Are you asking what the current rules are or what they should be? If “what they should be”, then I’d say no to all scenarios.
Charity should never be an obligation.
A compromise might be for the RR to sell or lease the line to the shipper oer 3rd party if such action would improve the economics.
In reality, what shipper has no alternative transportation? And, aren’t a shipper’s transportation costs always a factor of his location, no matter what the mode?
Right on, Oltmannd! Further, I believe, although I am not absolutely certain, that the answer is just plain ‘no’, which, for once, makes what is agree with what should be (IMHO).
This was not true years ago, when there were certain passenger services which were mandated under mail regulations – and they usually were ones which lost bundles of money but pleased some local politico.
Keep in mind that railroads are businesses, not agencies of the government.
In these instances, doesn’t the railroad usually just start sending whopping “switch maintenance” invoices to the property owner, and let the property owner ~cancel~ rail service by refusing to pay the maintenance fee?
AG wrote: === In these instances, doesn’t the railroad usually just start sending whopping “switch maintenance” invoices to the property owner, and let the property owner ~cancel~ rail service by refusing to pay the maintenance fee? That’s what I always thought happened. === You are correct, sir. Usually around five figures will do it. The bill is usually sent about the time that there hasnt been a movement in about 1-2 years or more.
Under any obligation? Under the old ICC, the answer would have been yes. Not just passenger but freight, too. Empty sidings (or barely used) sat around for the one time a year that an industry was negotiating their trucking rates and would send a load out by rail to let the trucking company know they had made their final offer. Then, back to the weeds and grasshoppers until next year. If a company couldn’t afford the rates (or a rate increase)? Oh, let’s not get started on that process…
When I was a business manager with a class one, I had a customer who wanted me to act in their behalf as teh MOW dept had sent them a bill for a switch fee at one of their recievers and then a 30 day notice they were going to pull the switch. He called me with 10 days remaining to teh witching hour…he was even so clueless to admit to me that they did not intend to do any rail business with us, he just wanted to use it to leverage truck rates. Obviously this was not a good customer and expected I do him a favor even though he always did things to destroy any relationship with the RR. I just was too busy and the switch was pulled. A little birdie even informed the trucker involved. Sometimes selfishness and arrogance does not pay off.
Our company got a notice by a class one they intended on closing a branch as we were the only remaining shipper/recewiver there. They accumulated track maintanace costs as a part of the cost structure in teh rate for which we shipped product on for decades but never maintained the branch. Since our source is high volume and 2000 miles away, we needed rail, but we negotiated a volume commitment over a number of years at roughly the same rate and they agreed to fix the line and keep running. This was a good relationship negotiation where everyone came out a winner.
1.) with a main track, the STB 'Offer For Assistance" and directed service rules still apply
2.) on a side track, there are individual Public Utilities Commission/ Railroad Commission rules that apply per that state. Some states are more aggressive than others.
3.) If that shipper has no M&O agreement / contract/ license with the railroad for use of a track, the “NO” part of what slotracer is talking about really kicks in. It still amazes me how ignorant industry can be, especially those that don’t use rail service and then expect it to be there (and somehow think they don’t have to invest in track maintenance, or have any financial responsibility)
4.) If you want to see how the STB reacts to the base premise of the question, look at the Cleveland Terminal Warehouse, Saratoga WY (ex- Louisiana Pacific Fiberboard Plant/ WYCO) and PYCO cases.
Seen some of their driveways? (Not figured into their irrational business plan’s operating costs and not about to comply with the Elkins Act tenets if it costs them instead of helps them)
(This former roadmaster was known to take substandard industry tracks out of service, remove switches not covered by a valid contract or get Supt.s to keep TE&Y people and locomotives from operating over certain tracks that an industry wouldn’t maintain, would not sign an O&M contract for or wouldn’t remove safety violations on…let the industry move the cars over bad track at their own risk.)