CSX claims Norfolk Southern, shortline in cahoots at Norfolk container terminal

RELATED TOPICS: CSX | NORFOLK SOUTHERN | EAST | OPERATIONS | REGULATION
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NORFOLK, Va. — CSX Transportation executives say Norfolk Southern and a terminal railroad are in a conspiracy to block CSX access to the largest container terminal in Hampton Roads, Va.

In a complaint filed Oct. 4 in U.S. District Court for Eastern Virginia, CSX charges that NS is violating antitrust laws by using the Norfolk & Portsmouth Belt Railroad to monopolize the intermodal business at the Virginia Port Authority's Norfolk International Terminals.

“NS in conspiracy with the [short line] ... have operated [the short line] as a vehicle for advancing NS's interest at the expense of their contractual duties to CSXT,” the complaint reads.

NS and CSX jointly own the belt railroad. The belt line was created in 1897 to provide equal access to the port for eight original railroad shareholders. Through the course of mergers, NS owns 57 percent of the belt line to CSX's 43 percent. CSX says NS has packed the shortline’s management with former NS employees, and “has caused [the shortline] to charge unreasonably high rates for intermodal freight.”

CSX has facilities in Portsmouth, Va., and relies on the Norfolk & Portsmouth for access to Norfolk International Terminals. NS has a direct connection from the 567-acre facility to the NS Heartland Corridor.

At a shortline board meeting in April, CSX says it proposed a new service plan that would lower the per-car switch rate and a give CSX a guaranteed minimum volume of 18,000 cars per year in or out of the terminal. The proposal was met by “baseless and pretextual barriers,” and the board did not consider it.

“Defendants' imposition of unreasonable and anticompetitive rates harms everyone … except NS,” according to the complaint. “This conspiracy has served to enhance and further solidify NS's monopoly power in the relevant market, which has the effect of severely restricting supply and increasing the prices charged to customers for intermodal transportation.”

Norfolk Southern and CSX also compete for intermodal business at the ports of Charleston, S.C., and Savannah, Ga.

Virginia Ports do not provide statistics for individual terminals. Overall, the port authority reported handling 1.6 million containers in 2017, second to Savannah's 4 million containers among ports in the Southeast. Overall Savannah ranked 4th and Norfolk ranked 7th in cargo value among all U.S. ports, according to the U.S. Census Bureau.

More information is available online.

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