Green Eagle Railroad’s (GER) proposal to construct and operate an approximately 1.335-mile rail line in Maverick County, Tex., “is not needed to meet existing or future demand for transportation, would be less efficient and more costly than existing rail services, would harm existing rail services provided by Union Pacific and BNSF, and does not appear to be financially viable,” UP told the Surface Transportation Board (STB) in an Aug. 25 filing commenting on the transportation merits of GER’s petition for exemption (download below).
The STB should “deny” the petition seeking an exemption under 49 U.S.C. § 10502 from the prior approval requirements of 49 U.S.C. § 10901 for the line’s construction, according to UP, and “require GER to submit an application for construction authority if GER decides to try to move forward with its proposal.”
“GER is proposing to insert a new carrier in the middle of the current, direct connection between Union Pacific … and BNSF …, on the one hand, and Ferrocarril Mexicano, S.A. de C.V. (Ferromex), on the other hand, at the United States-Mexico border in Eagle Pass, Texas,” UP reported in its STB filing. “GER’s proposal to construct and operate the Line is inconsistent with the public convenience and necessity.”
The Eagle Pass Gateway, UP told the STB, “is the second busiest railroad crossing between the United States and Mexico, but existing capacity is sufficient to accommodate current demand for rail transportation, and capacity can be expanded if necessary to meet future demand.” UP said it is “actively planning operational improvements and capital investments to support improved fluidity and growth of traffic.”
UP and BNSF move about 19 trains per day to and from the Gateway using a UP-owned line over which BNSF has trackage rights, according to UP, and at the border, both railroads interchange traffic directly with Ferromex. UP said that it supports its cross-border operations from Clark’s Park Yard, which is approximately 4.2 miles north of the border. BNSF, it noted, supports cross-border operations from Ryan’s Ruin Yard, which is on UP’s line approximately 14 miles north of the border. Ferromex supports its cross-border operations from Rio Escondido Yard, which is approximately 9.9 miles south of the border. “Trains cross the border using the Eagle Pass-Piedras Negras International Railway Bridge, which is owned and operated by Union Pacific on the U.S. side of the border and owned by the Mexican federal government and operated by Ferromex on the Mexican side of the border,” UP said. “Later this year, Union Pacific and Ferromex expect to shift cross-border crew changes from the bridge to Clark’s Park Yard, reducing the amount of time trains are stopped on the bridge, which will improve security, service, and capacity.”
According to UP, GER’s proposed line would create “a second, duplicative route” connecting UP and BNSF with Ferromex. “As shown below in Figure 2, the Line would extend 1.335 miles between milepost 31 on Union Pacific’s Eagle Pass Subdivision south of Clark’s Park Yard and a new bridge crossing the Rio Grande, then connect with a new 17.8-mile line to Ferromex’s Rio Escondido Yard,” UP said. “The Line would reduce Union Pacific’s and BNSF’s current route to the border by 2.9 miles, but GER’s route in Mexico would be 7.9 miles longer than Ferromex’s current route from the border to Rio Escondido Yard, creating a longer route overall between Clark’s Park Yard and Rio Escondido Yard.”
Additionally, UP said, GER’s proposed line “would not increase rail competition for cross-border traffic.” GER would have to interchange all its cross-border traffic with either UP or BNSF, it noted. “GER’s proposed Line thus would increase the number of carriers required to complete cross-border movements, and thus the complexity and cost of such movements, but would not increase the number of independent routing options available to shippers,” UP explained.
GER also “does not appear to have a viable plan for operating its proposed Line without harming existing service offered by Union Pacific and BNSF,” UP pointed out. “GER’s petition does not address the practical issues that would arise from moving cross-border trains averaging 9,300 feet in length while constructing only 1.335 miles (i.e., approximately 7,050 feet) of new track between the border and its connection with Union Pacific’s Eagle Pass Subdivision. The difference between train length and track length means GER is not planning to construct sufficient facilities to receive southbound trains in interchange from Union Pacific or BNSF: the rear end of a 9,300-foot train would block Union Pacific’s main line all the way past the switch between the main line and the lead track at the south end of Clark’s Park Yard. For northbound trains, GER is not planning to construct sufficient facilities to conduct FRA- [Federal Railroad Administration] mandated safety inspections or the customs and agricultural inspections conducted by CBP [U.S. Customs and Border Protection]. The difference between GER’s proposed train length and track length would cause operating issues even if Union Pacific interchanged southbound trains with GER in Clark’s Park Yard and GER’s northbound train received FRA and CBP inspections in the yard. GER train arrivals and departures would disrupt the flow of other traffic in and through the yard.”
UP told the STB that “GER’s harmful impacts on operational efficiency and customer service would increase if GER were to handle some but not all cross-border traffic at Eagle Pass.” For example, it said, if a UP train was “moving northbound to Clark’s Park Yard when a GER train was entering or leaving the yard, the Union Pacific train would have to stop and wait for the GER train to clear the switch between Union Pacific’s main line and lead track, delaying Union Pacific’s train.” In another example, UP said switching activity at Clark’s Park Yard would increase at the same time GER’s presence would prevent UP from clearing space in the yard. “Specifically, if northbound traffic were divided between Ferromex-Union Pacific and Ferromex-GER-Union Pacific routings, Union Pacific would need to perform classification and blocking on twice as many trains,” UP said. “Union Pacific also might need to hold cars for a longer period to build efficient blocks, which would consume still more yard capacity. The added work and congestion would raise transportation costs and reduce service quality.”
Finally, UP said, GER’s proposed line “does not appear to be economically viable.” GER explained in its petition that its plan “is to enter into agreements with Union Pacific and BNSF for those carriers to shift their cross-border traffic to the Line,” UP said. “However, Union Pacific has no intent to discontinue using its border crossing at Eagle Pass. GER appears to have no plan for making the Line economically viable if Union Pacific and BNSF do not voluntarily agree to route their customers’ traffic over GER. In fact, GER has acknowledged that if it ‘is unable to attract all cross-border rail traffic . . . GER would be unable to construct and/or operate the proposed line.’ And even if Union Pacific and BNSF were to voluntarily reroute their traffic over GER, there is no evidence that GER would earn sufficient revenue from shuttling trains between the U.S. and Mexico to make its Line economically viable.”
Construction of a new railroad line requires prior STB authorization, “either through issuance of a certificate under 49 U.S.C. § 10901 or, as requested by GER, through an exemption under 49 U.S.C. § 10502 from the application requirements of § 10901,” UP summed up. “Section 10502 directs the Board to exempt construction proposals from the requirements of § 10901 when it finds that: (1) regulation is not necessary to carry out the rail transportation policy of § 10101, and (2) either (a) the transaction is of limited scope or (b) application of the statutory provision is not needed to protect shippers from the abuse of market power … In considering a construction application under § 10901, the Board ‘shall’ grant the application ‘unless the Board finds that such activities are inconsistent with the public convenience and necessity’ … In reviewing construction applications, the Board examines ‘whether (1) the applicant is financially fit to undertake the construction and provide service; (2) there is a public demand or need for the proposed service; and (3) the construction project is in the public interest and will not unduly harm existing service’ … Based on the record here, the Board cannot find that regulation is not necessary to carry out the rail transportation policy of § 10101. Accordingly, the Board should require GER to submit a full application under § 10901.”
