STB: CN can't unilaterally designate CP interchange at Clearing Yard

CN's Wisconsin Central Ltd. cannot unilaterally designate the Belt Railway Co. of Chicago's (BRC) Clearing Yard as the location where it will receive traffic in interchange with Canadian Pacific's Soo Line Railroad Co., the Surface Transportation Board ruled last week.

In April, CN/Wisconsin Central petitioned the STB for a declaratory order on a long-running disagreement with CP/Soo Line concerning interchange operations in the Chicago area. CN asked the board to determine whether CN had the right to designate the Clearing Yard, which BRC owns, as the point where the railroads may interchange and who should pay for the interchange costs.

From 2010 to 2019, CN and CP agreed to interchange most freight cars near Bartlett, Illinois. In 2019, CN notified CP that CN would terminate that agreement and designate its Kirk Yard in Gary, Indiana, as the new interchange location. CP objected, and petitioned the board for a decision. During their negotiations and related litigation, CN and CP discussed interchanging at Clearing Yard, but couldn't agree on who should pay switching fees to the BRC. Still, the two railroads reached an interim agreement to deliver cars to Clearing Yard.

In August 2019, the STB ruled that Kirk Yard was an unreasonable interchange location and, in April, CN petitioned the board to determine if CN has the right to designate Clearing Yard as the point for receiving CP traffic and, second, whether each railroad must bear its own costs for those interchanges, including fees for BRC's switching services.

In its decision, the STB determined that CN cannot unilaterally determine the interchange point, and therefore the board doesn't need to determine whether each railroad must pay its own interchange costs.

The STB also noted that it has long recognized the importance of the Chicago gateway to the nation's rail network. 

"If switching at Clearing Yard benefits the movement of rail cars in the Chicago area, then the board would encourage CN and CP to reach a mutually beneficial agreement to interchange there," the decision states.

The full decision may be read here.