The Surface Transportation Board (STB) on April 6 approved Norfolk Southern’s (NS) application to control Norfolk & Portsmouth Belt Line Railroad Company (NPBL), following a yearslong dispute with CSX over allegations of monopoly.
NS, since 1982, had owned a 57% majority of NPBL and CSX the remaining 43%. As part of the decision (download below), NPBL will remain a neutral switching carrier operated on a “uniform, cost-plus basis.”
NPBL operates approximately 36 miles of rail line from Portsmouth to Norfolk and about 27 miles of trackage rights over NS track from Norfolk to Chesapeake (see maps below); it connect with CSX at Portsmouth, with NS and Chesapeake & Albemarle Railroad at Chesapeake, and with the Buckingham Branch Railroad at Norfolk. NPBL’s system also connects with the 21 industrial customer facilities in the Norfolk/Portsmouth area, and the Portsmouth Marine Terminal, and offers service to and from Norfolk International Terminal (NIT), a deepwater marine terminal in Norfolk, via trackage rights that NPBL holds over NS’s facilities that lead to NIT.
“The present case involves unique circumstances,” STB said in its decision. “NS seeks authority to acquire control of NPBL on a forward-looking basis after having failed to seek and obtain authorization when NS acquired de facto control of NPBL in 1982. There has been significant litigation before the Board and multiple courts stemming from Norfolk Southern’s failure to seek and obtain such authorization and the status of NPBL since that time. Indeed, the Board determined that this was a significant transaction to ensure that the agency had the information necessary to fully analyze any competitive impacts of the transaction.
“After considering the application and the full record in this proceeding, the Board finds that there is not likely to be a substantial lessening of competition, the creation of a monopoly, or restraint of trade in freight surface transportation in any region of the United States as a result of this transaction.“
The STB said that its conclusions are based on these “key considerations”:
- “First, NS has made commitments, which are part of NS’s application, that appropriately prevent it from using its control over NPBL to advance just its own interests. In particular, NS has committed to maintaining a uniform, cost-based rate for line haul switching service as provided in the NPBL Participation Agreement. No shippers have raised forward-looking competitive concerns regarding traffic that moves or could move over NPBL.
- “Second, CSXT appears to be raising competitive concerns that are premised more on NPBL having a two-owner structure than on NS’s control of the NPBL. CSXT’s principal complaint—that NS has blocked NPBL from considering CSXT’s rate and operational proposals for intermodal traffic—is not attributable to NS’s control (which, again, is restrained both by agreements and commitments in this proceeding), but rather the fact that with NPBL now down to two owners, CSXT lacks the votes to have NPBL deviate from the uniform rate over NS’s objection. Even without NS having authorized control of NPBL, that two-owner corporate arrangement has been in place for decades, with CSXT not only aware of the arrangement but consenting to it in 1989. CSXT essentially is seeking a right that it never had under the 1897 NPBL Participation Agreement: enhanced rail access for intermodal traffic to and from NIT, with an intermodal-specific rate, without the consent of NPBL’s co-owner.”
The STB pointed out that in “situations where one railroad obtains majority control over a joint-carrier owned terminal facility, the Board has asked whether control ‘raises the potential for manipulation … in the interests of the majority owner’” and has “recognized that, in certain circumstances, the potential for manipulation can be adequately constrained by enforceable, rail carrier commitments.” Here, the STB said, “NS has represented that, should the Board authorize NS to control NPBL, it will continue to adhere to a uniform, cost-based rate for line-haul switching in conformity with the NPBL Participation Agreement, and there will be no change in NPBL’s operations and no elimination of routing or interchange options.”
The STB concluded “that a requirement that NS adhere to its commitments, combined with more intensive monitoring during an oversight period, are sufficient to ensure that the competitive balance remains the same going forward.” Additionally, considered collectively, the Board said, “these commitments will appropriately restrain NS from manipulating NPBL to serve its interests to the detriment of CSXT and the shippers served by CSXT via NPBL, and thus mitigate concerns … about foreclosure of NPBL as an option for this traffic. Because adherence to these commitments is key to the Board’s approval, if NPBL discriminates in its application of the uniform line-haul switching rate, or other switching rates, in ways that benefit NS to the exclusion of CSXT, or makes operational changes that have a similar effect, the Board would consider reopening this proceeding in order to impose appropriate conditions or take other action.”
While the STB approved NS’s application to acquire control of NPBL, its approval is subject to the condition that “NS adhere to the following representations made on the record during the course of this proceeding”:
- “NS will continue to adhere to NPBL’s century old governance principles to be an impartial terminal railroad operated on a uniform, cost-plus basis for its connecting carriers to serve customers along its lines.”
- “NS agrees to have the NS/NPBL trackage rights compensation set by the Board using SSW cost-based principles.”
- “No existing transportation options for shippers and carriers will be reduced…. No existing rights of CSXT or NPBL will be reduced or limited in any way.”
- “There will be no changes in interchange options. There will be no changes to existing routing options.”
- “NS will not absorb NPBL’s operations into its own. NS will not be conducting the switching that NPBL currently conducts, nor will NS be setting NPBL’s switch rates. NPBL will continue to do so consistent with its corporate purpose.”
- “[W]hen a vacancy occurs in [the position of NPBL President and Board Member], NS is committed to not appointing a former NS or CSXT employee.”
The STB said it will impose a five-year oversight period during which time NPBL must inform the Board of “any changes to its switching and any related tariffs, any significant operational changes, and any significant changes it makes to its track and related facilities, along with an explanation for the changes, and any such changes must be consistent with the conditions imposed in this decision.”
The Board said its decision will be effective May 6, 2026.
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