Chicago interchange dispute: Canadian Pacific 1, Canadian National 0

Canada's Class I railroads spar over where to trade an average of 83 cars a day near Chicago
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WASHINGTON — Federal regulators have given Canadian Pacific a limited victory in its dispute with Canadian National over where the railroads should interchange traffic in Chicago.

CN’s unilateral request to have Canadian Pacific run 84 miles through the busy Chicago terminal in order to interchange at Kirk Yard in Gary, Ind., is unreasonable, the Surface Transportation Board ruled last week.

“Requiring CP to travel 84 miles one way on CN’s system solely to effectuate interchange — a distance that would likely cause CP crews’ permissible hours of service to expire and would require a dedicated locomotive — would be unreasonable and is ‘work which properly belongs’ to CN,” the board said in its Nov. 29 decision.

In May, CN unilaterally sought to shift interchange from Spaulding in Bartlett, Ill., not far from CP’s Bensenville Yard, to Kirk Yard after the railroads could not mutually agree on a new interchange location.

CP asked the STB to intervene, and the board subsequently ordered the railroads into mediation. Those talks failed, however, and the railroads participated in oral arguments before the board in August.

CN and CP in August 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 the Belt Railway of Chicago’s Clearing Yard.

Where CN and CP finally decide to interchange under a permanent agreement remains up to the railroads, the board says.

“The Board’s determination that Kirk Yard is not a reasonable interchange location does not mean that CN and CP must continue to interchange at Spaulding,” the board said. “Indeed, CN and CP are free to interchange at other mutually agreeable locations.”

The STB also said the status of Clearing as a reasonable interchange location remains in limbo.

“The Board finds here only that CN may not unilaterally designate Kirk Yard to receive cars in interchange from CP,” the regulators wrote, noting their decision made no determination on the reasonableness of Clearing.

“Regardless of how the Board might rule on such a designation, it is unclear whether CN has actually designated Clearing Yard as the interchange point, or whether it remains an alternative proposal,” the board said. “During the oral argument, it appeared that CN and CP were not in agreement about whether Clearing Yard had been designated as the interchange point, and CP’s counsel stated that the reasonableness of Clearing Yard had not been fully briefed.”

The railroads exchange an average of 83 cars per day in Chicago.

CN sought to shift interchange away from Spaulding due to congestion on its increasingly busy single-track main line.
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