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4/2/2009



Rail News: Rail Industry Trends

Chemical distributors association opposes UP's stance on STB common-carrier petition


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Earlier this week, the National Association of Chemical Distributors (NACD) filed comments with the Surface Transportation Board (STB) that oppose Union Pacific Railroad’s request for an exception from its common-carrier obligation to transport chlorine over long distances.

In their petition, UP officials question whether the Class I should be forced to quote rates to a shipper to transport chlorine — a toxic inhalation hazard (TIH) — about 1,900 miles from Utah to the Gulf Coast when ample chlorine supplies are available closer to the Gulf Coast region. In addition, they assert that that the chlorine would travel through high-threat urban areas and other governmental agencies have requested that the railroad find ways to reduce TIH shipments to lower transportation risks.

NACD officials argue that if the railroad is granted the exception, the entire common-carrier obligation to transport TIH materials will be threatened.

"The common carrier obligation exists for the specific purpose of requiring the railroads to provide service to shippers when they would otherwise choose not to do so because it would be unprofitable or inconvenient,” NACD Vice President of Government Affairs Jennifer Gibson said in the association’s comments. “Given the monopolies that the major railroads enjoy in many areas, the common-carrier obligation is the only recourse that shippers have to ensure they are able to receive the rail service they need to safely and efficiently transport their products, particularly hazardous materials."

Market disruptions would occur if railroads were granted exceptions to their common-carrier obligation, NACD officials believe. In addition, heavy demand in the Gulf Coast region routinely requires that chlorine be shipped in from other parts of the country and the problems would arise if the transportation of TIH materials is shifted from rail to truck, they said.

The STB is accepting comments on UP’s petition until April 10 (the board last month extended the previous deadline of March 31). UP’s rebuttal and reply comments are due April 30.


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