Chicago Illinois USA - CP has asked federal regulators to determine whether the Belt Railway of Chicago's (BRC) Clearing Yard is a reasonable location to interchange traffic with CN.
 
It's the latest twist in the Canadian railways' long-running dispute over where to exchange traffic in Chicago.
 
The U.S. Seventh Circuit Court of Appeals in December vacated an October 2020 STB decision which said CN could not unilaterally designate Clearing Yard as the railways' Chicago interchange.
 
The court sent the matter back to the STB, noting that a railroad can designate a third party, like BRC, to receive interchange traffic.
 
The ruling also said the STB did not resolve the question of who should bear the cost of the BRC's switching services.
 
CN last month argued that CP should have to pay BRC's switching fees for CN-bound traffic delivered to Clearing, just as CN pays the fees for CP-bound traffic handled at Clearing.
 
But CP's filing this week says that's not the case, and sought to bring the matter full circle by asking whether Clearing is a reasonable interchange compared to Spaulding, east of Elgin, Illinois, where the railways exchanged traffic for more than a decade.
 
Only after that determination is made, CP says, can the board then determine which railroad should pick up the tab.
 
"The question of reasonableness of Clearing relative to Spaulding must take into account the fact that interchange at Spaulding ensures CP is able to keep its Bensenville Yard clear of CN interchange traffic when Clearing is struggling," CP argues.
 
"Keeping cars out of Clearing and Chicago helps protect CP's and the terminal's fluidity. As CN itself represented to the Board as a prime public interest justifying its acquisition of the EJ&E, the acquisition would allow CN to keep traffic out of the Chicago terminal area, and Clearing in particular, to the benefit of all stakeholders."
 
The BRC operating agreement requires each co-owner of the switching line to pay the BRC fees for traffic delivered to Clearing, CN contends.
 
CP disagrees.
 
"CN's argument conveniently ignores the fact that it voluntarily assumed the obligation to pay the BRC fees for CP-bound cars when CN asked CP to accept cars via the BRC rather than at CP's preferred interchange location of Spaulding," CP wrote.
 
"CP continues to make its facilities at Spaulding available to receive cars from CN for free as the statute requires. Also CN's argument ignores the fact that it is CN that is demanding that CP deliver cars to CN via BRC rather than delivering to CN's interchange facilities at Spaulding which are free to CP. And the change to Clearing in both directions is for CN's benefit."
 
The railways' dispute dates to May 2019, when CN sought to shift CP interchange from Spaulding, in Bartlett, Illinois, to its own Kirk Yard in Gary, Ind.
 
The daily interchange at Spaulding often blocked area grade crossings and tied up CN's busy single-track main line.
 
CP objected and asked the STB to intervene.
 
CN and CP ultimately reached an interim agreement to move Spaulding interchange to Clearing, with CN temporarily reimbursing CP for the BRC's switching fees until the STB reached a decision on the matter.
 
When the board sided with CP, CN filed suit at the federal appeals court in Chicago.
 
Bill Stephens.