Chem distributors group pleased with US rail panel decision

12 June 2009 22:44  [Source: ICIS news]

HOUSTON (ICIS news)--The National Association of Chemical Distributors (NACD) said it was pleased by the US Surface Transportation Board’s (STB)  ruling that Union Pacific has an obligation to serve companies seeking to transport hazardous chemicals, the group said on Friday.

Union Pacific filed a petition with the STB on 18 February, requesting the board to determine the extent of its common carrier obligation to transport certain chemicals over long distances when similar supplies are available closer to the destination.

The dispute surrounded Utah-based US Magnesium, which transports chlorine by railroad to Louisiana and Texas, the NACD said.

Union Pacific contended it was not reasonable to have to transport chlorine over 1,000 miles (2,590 kilometers) when there were ample sources of chlorine closer to the destination points.

In its ruling, the STB said the Union Pacific “alleges safety concerns in arguing that USM’s requests are unreasonable, but it fails to establish that the transportation at issue is unsafe. ... Indeed, the record shows that UP has moved chlorine for USM to two of the denied destinations in the last two years”.

“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,” the NACD said.

“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," the group added.

The NACD said it was also pleased that the STB recognised the appropriate role of the US Transportation Security Administration (TSA) and the Department of Transportation (DOT) in regulating chemical rail shipments in the areas of safety and security.

Additional reporting by Brian Ford

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By: Ben DuBose
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