Railroads as Common Carriers

Freight railroads are greatly concerned about their transportation of shipments of hazardous materials referred to as toxic inhalation hazards. That concern has grown a great deal since the 2005 collision of two Norfolk Southern trains in Graniteville, S.C., where the release of chlorine and other hazardous materials from one or more of the cars resulted in eight deaths, dozens of injuries and the destruction of the consignee’s plant, with the cost to the railroad of several hundreds of millions of dollars.

Now pending before the Surface Transportation Board are a proceeding brought by Union Pacific and a complaint challenging the validity of Railamerica tariffs in which railroads are looking for ways to reduce the catastrophic financial losses they would sustain in the event of a major accident involving their transportation of TIH. The odds the board will give the railroads any relief are remote, considering the board recently refused to certify a new railroad because it sought to exclude from its holding out as a common carrier the transportation of TIH.

This concept of holding out, or presenting, a service as a common carrier is a foundation of freight transportation, so fundamental it is practically invisible to many yet too vital to be taken lightly. The public policy issues around common carriers and the transport of hazardous materials such as TIH are so significant they should demand the attention of Congress.

Common carriers arose under the common law of England and applied in the first instance to draymen. A drayman was held to transport for compensation the shipments of anyone tendering freight the drayman held itself out to transport. A drayman paid to haul lumber from mills to furniture manufacturers in a town thus was not required to transport casks of whiskey to the town’s saloons.

The concept was brought to America and applied to railroads after they developed as freight carriers.

A Treatise on the Law of Bailments and Carriers, published in 1917, well after most of the nation’s railroad lines were in place and the Interstate Commerce Commission had been installed to regulate the railroads, declared, “No common carrier professes to carry all kinds of goods, and no one is liable for a refusal to carry goods unless it can be shown that the goods offered were those which he ordinarily carried or, because of the public nature of his business, was bound to carry.”

At the time, the railroads didn’t knowingly transport shipments of, for example, nitroglycerine.

The idea of holding out one’s business for service has remained a constant in freight shipping law even if the goods carried have changed.

Obviously, a hundred years ago, the railroads didn’t hold themselves out to transport loaded containers of freight or automobiles and automobile parts. Such loads simply weren’t in the stream of interstate commerce. Today, the railroads do hold themselves out to transport these commodities. That container-on-flatcar service and motor vehicles and motor vehicle parts or accessories happen to appear on the STB’s list of exempt services or commodities doesn’t affect the railroads’ holding out.

The board may refrain from faulting the railroads for failing to transport loaded containers of freight and automobiles and automobile parts, but that doesn’t make the railroads any less common carriers of those commodities.

Just as commodities over the years have been added to the railroads’ holding out, so, too, commodities have been removed from their holding out. The railroads regularly handled less-than-carload shipments. Indeed, earlier editions of their Uniform Freight Classification carried two columns, one with the commodities’ ratings in less-than-carload quantities and the other with their ratings in carload quantities.

Just try tendering a 500-pound pallet of bagged bauxite to a railroad today. It would look at you as if you’d lost your mind.

Similarly, the railroads regularly transported livestock. The Twenty-Eight Hour Act required the railroads to unload the livestock every 28 hours, 36 hours in excepted cases, so the animals could be watered and fed. Each railroad itself or through affiliated companies maintained pens along the routes of their trains that carried livestock from the feed lots to the slaughterhouses so the animals could be unloaded, watered and fed. Those pens have disappeared along with the railroads’ holding out to transport livestock.

Less-than-carload shipments of freight and carloads of livestock weren’t removed from the railroads’ holding out because an appropriate agency had failed to promulgate comprehensive regulations for their safe transportation.

Yet the board appears to be following a 1978 ICC decision that held the railroads as common carriers were obliged to transport spent nuclear fuel because the Atomic Energy Commission and other appropriate agencies had promulgated comprehensive regulations for its safe transportation.

The railroads’ holding out as common carriers, however, can’t be made dependent upon what actions may or may not be taken by government regulatory agencies. Their holding out as common carriers is a matter committed to their discretion.

Public policy may dictate the railroads should transport TIH, but the terms and conditions under which they should be required to do so is matter for Congress to decide.

Fritz R. Kahn is an attorney in Washington, D.C., specializing in transportation regulatory matters. Contact him at xiccgc@verizon.net.

For the full story: Log In, Register for Free or Subscribe