STB seeks input on proposed CP-KCS schedule, allows Sanimax complaint against UP to proceed

The Surface Transportation Board (STB) is inviting public comments on a proposed procedural schedule for consideration of the Canadian Pacific and Kansas City Southern merger application now pending before the board.

On Sept. 15, CP and KCS filed an amended notice of intent to file a merger application, and on Oct. 29 filed their application with STB. The board is now proposing a procedural schedule that allows sufficient time for the submission and review of evidence and arguments, as well as careful consideration of the merits of the proposed transaction.

Among other things, the schedule proposes dates for comments to the application, the filing of responsive applications, and the submission of final briefs. Additionally, the board’s proposed schedule provides that the board will decide in a subsequent decision whether to conduct a public hearing, which would be held on a date following the submission of final briefs.

Written comments on the board’s proposed schedule are due Nov. 12.

Meanwhile, in a separate case, the STB granted Sanimax USA LLC's request for the board to partially revoke commodity exemptions and permits its service case against Union Pacific Railroad to proceed. The decision also denies UP’s motion to dismiss Sanimax’s complaint and sets a procedural schedule, STB officials said in a press release.

On Nov, 6, 2020, Sanimax filed a complaint against UP alleging that UP’s reduction in service days and repeated service failures violate UP’s common carrier obligation and constitute unreasonable practices. On Nov. 30, 2020, UP filed a motion to dismiss Sanimax’s complaint, stating that the commodities at issue are exempt from STB regulation. Further negotiations between Sanimax and UP were unsuccessful.

In this decision, the STB explained it has broad authority to exempt persons, transactions and services from certain regulation when it finds the regulation unnecessary to carry out the rail transportation policy, the transaction or service is of limited scope, or the application of the provision is not needed to protect shippers from the abuse of market power.

In this case, however, the STB noted that, given the issues raised in Sanimax’s allegations, including its alleged dependence on UP’s service, it is important that the Board partially revoke the commodity exemption so that the Board can examine Sanimax’s claims and UP’s responses in order to determine if regulatory relief is appropriate and warranted.

To read the board's decision in the case, click here.