Shippers sue rails over train control deadline

OREANDA-NEWS. October 05, 2015. Some of the nation's largest shipper groups are headed toward a legal showdown with railroads as they work to ensure their products will move even if railroads miss the 31 December federal deadline to install positive train control (PTC) technology.

Railroads have begun to notify shippers that they might be forced to refuse shipments because Congress has not yet extended the deadline it set in 2008 for installation of PTC, a computerized system designed to avoid derailments and accidents. Legislation has passed the Senate and been introduced in the House of Representatives to extend the PTC deadline, but final passage is uncertain.

The American Chemistry Council, the Chlorine Institute and the Fertilizer Institute on 29 September filed a complaint with a US district court over the matter. The complaint asks the US District Court in Washington, DC, to find that railroads cannot lawfully refuse to transport toxic-by-inhalation (TIH) chemicals because of the PTC requirement. The chemicals shippers filed a concurrent petition with the Surface Transportation Board seeking an order to eliminate the uncertainty created by the mandate.

The 2008 law passed by Congress that mandated installation of PTC, called the Rail Safety Improvement Act, does not supersede railroads from having to comply with the common carrier obligation, which requires railroads to provide transportation upon a reasonable request for service, the complaint says.

"Plaintiffs and their member companies will suffer immediate and irreparable harm as a direct and proximate result of defendants' refusal to accept, or to state whether they will accept, TIH materials for transportation on main lines that defendants have not equipped with PTC," the shippers said.

The complaint names all seven Class I railroads as defendants.

The shippers said that chemicals such as chlorine and anhydrous ammonia are vital for water treatment and agriculture. Three to four trucks are required to carry the same volume of chemicals as one railcar, and there is insufficient truck capacity, they said.

Railroads have previously said they do not believe that a request for common carrier service to move TIH chemicals would be "reasonable" because of the federal law that would enact penalties and potentially subject them to additional liability. Embargoes restricting TIH traffic handling could start as early as Thanksgiving to ensure the railraods can clear their systems of all carloads by the 31 December deadline.

The Association of American Railroads (AAR) told Argus today that it would not speculate on a potential court decision.

"The legal action taken by shippers is regrettable, but not surprising considering the situation that has been created by the lack of a PTC deadline extension," the railroad group said. "This situation highlights the difficult position railroads find themselves in as the clock ticks down on getting a PTC extension."

AAR said Congress can ensure that legal action by shippers and the potential nationwide shutdown will be avoided if it passes a PTC extension.