Canadian Pacific, Canadian National locked in Chicago interchange dispute

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WASHINGTON – Canadian Pacific has asked federal regulators to intervene in an interchange dispute with Canadian National, which wants to shift where the railroads exchange traffic in Chicago.

CN aims to move the interchange from Spaulding in Bartlett, Ill., not far from CP’s Bensenville Yard, to CN’s Kirk Yard in Gary, Ind., effective May 10.

CP opposes the move and argues that CN cannot unilaterally shift the interchange. This week CP asked the Surface Transportation Board to declare Kirk Yard an unreasonable interchange location and to issue a preliminary injunction to keep the interchange at Spaulding until an acceptable agreement can be reached.

The STB on Wednesday ordered CN to reply to CP’s requests by May 6.

CP and CN have been exchanging traffic at Spaulding since 2010, when they consolidated their Chicago Terminal interchange at one location under a single agreement after CN’s acquisition of the Elgin, Joliet & Eastern. CP and CN lines intersect at Spaulding, 17.2 miles west of Bensenville Yard.

CP delivers an average of 36 cars per day to CN, while CN delivers an average of 47 cars to CP. Scrapping the interchange agreement without an alternative in place would quickly congest Bensenville Yard and harm shippers, CP told the STB.

CN Chief Operating Officer Mike Cory contends that Spaulding is no longer an efficient interchange location because switching ties up its single-track main line, which leads to congestion on CN’s system and blocks area grade crossings.

CN and CP have been discussing moving the interchange since last year but have been unable to agree on a location.

Alternates included CN’s former Gulf, Mobile & Ohio Glenn Yard; Bensenville; and the Belt Railway of Chicago’s Clearing Yard. But the railroads could not agree how to split costs, including trackage rights over BRC and the Indiana Harbor Belt, or overcome potential operating difficulties at any of the alternate interchange points.

CN informed CP in March that it planned to cancel the interchange agreement and move the interchange to Kirk Yard, its main Chicago-area facility, effective May 10.

CP immediately objected.

“Interchange at Kirk Yard is unworkable and unreasonable,” Robert Johnson, CP’s executive vice president of operations, wrote in an April 3 letter to Cory. “Kirk is located on the opposite side of the Chicago Terminal from CP’s Bensenville Yard. CP has no assignment which goes there or near there.”

It’s a roundtrip of 200-plus miles from Bensenville to Kirk – including 168 miles on CN – that would require multiple crews, CP contends.

Cory, in an April 16 letter to Johnson, argued that interchanging at Spaulding places an unfair burden on CN.

“Manifest traffic interchanged between CN and CP are blocked and switched at Kirk Yard and then moved to Spaulding – a trip that is 84 miles one-way,” Cory wrote. “CN is currently doing that work now for both interchange cars received from CP and for interchange cars delivered to CP. This is inherently inequitable.”

Johnson replied two days later, noting that CN was free to change the interchange location but not at CP’s expense. “That’s only fair,” he wrote.

CP’s 40-page filing with the STB, which includes maps and letters exchanged between the railroads, is available online.
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