Court Opinion

ID: 187178
Source: CourtListenerOpinion
Date Created: 2011-02-05 03:14:44+00
Date Added: 2024-06-11T09:42:42.287653
License: Public Domain

United States Court of Appeals
          FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 14, 2008                   Decided June 24, 2008

                         No. 07-1070

        NORTH AMERICA FREIGHT CAR ASSOCIATION,
                     PETITIONER

                               v.

           SURFACE TRANSPORTATION BOARD AND
               UNITED STATES OF AMERICA,
                     RESPONDENTS

                 BNSF RAILWAY COMPANY,
                      INTERVENOR

          On Petition for Review of an Order of the
               Surface Transportation Board

    John M. Cutler, Jr. and Andrew P. Goldstein argued the
cause for the petitioner.
    Anika Sanders Cooper, Attorney, Surface Transportation
Board, argued the cause for the respondents. Thomas O. Barnett,
Assistant Attorney General, Robert B. Nicholson and John P.
Fonte, Attorneys, United States Department of Justice, and Ellen
D. Hanson, General Counsel, and Craig M. Keats, Deputy
General Counsel, Surface Transportation Board, were on brief.
                                  2

     Richard E. Weicher, Sidney L. Strickland, Jr., Robert M.
Jenkins III and David M. Gossett were on brief for the
intervenor.
    Before: HENDERSON, BROWN and KAVANAUGH, Circuit
Judges.
    Opinion for the court filed by Circuit Judge HENDERSON.
     KAREN LECRAFT HENDERSON, Circuit Judge:                  The
petitioner is North America Freight Car Association (NAFCA),
a trade association of companies that use private railroad freight
cars (i.e., cars that are owned or leased by the companies
themselves or by other private shippers rather than by the
railroad) to transport goods on track owned by railroads.
NAFCA seeks review of a decision of the Surface Transportation
Board (STB, Board) denying NAFCA’s challenge to “storage”
and “demurrage”1 charges (collectively 2001 Charges), which
the Burlington Northern and Santa Fe Railway Company—now
BNSF Railway Company (BNSF)—imposed in 2001 for empty
private freight cars that remain on BNSF tracks beyond a base
“free time” period (ranging from one to five days). See N. Am.
Freight Car Ass’n v. BNSF Ry., STB Docket No. 42060
(Sub-No. 1), 2007 WL 201203 (served Jan. 26, 2007) (STB
Dec.). NAFCA petitions for review on the ground that BNSF’s
charges violate three provisions of the Interstate Commerce
Commission Termination Act of 1995 (ICCTA):2 (1) 49 U.S.C.

     1
       “Demurrage” refers to “a charge assessed for detaining a freight
car, truck, or other vehicle beyond any free time stipulated for loading
or unloading.” PCI Transp., Inc. v. Fort Worth & W. R.R., 418 F.3d
535, 537 n.1 (5th Cir. 2005). “Demurrage” and “storage” are often
used interchangeably with respect to such charges.
     2
      The ICCTA, Pub. L. No. 104-88, 109 Stat. 803 (1995), abolished
the Interstate Commerce Commission (ICC, Commission), created the
STB, transferred to it the ICC’s remaining regulatory authority and
                                3

§ 10702(2), which requires that a railroad “establish
reasonable . . . practices” related to transportation and service;
(2) 49 U.S.C. § 10746, which requires that demurrage charges
fulfill two enumerated objectives; and (3) 49 U.S.C. § 10745,
which authorizes a rail carrier to compensate a shipper for
providing a service related to transportation. For the reasons set
out below, we deny NAFCA’s petition.
                                I.
     In July 2001, BNSF instituted a new “storage” charge for
empty private industrial cars (primarily tank cars) and
“demurrage” charge for empty private covered hopper cars,
which are used to transport grain, grain products and sugar.
Under BNSF’s plan, the storage charge for an industrial car
begins to accrue at the second 12:01 a.m. after “constructive
placement” of the car—that is, after BNSF notifies the shipper
the empty car is ready to deliver to the shipper—and continues
until the shipper directs BNSF to deliver the car to the shipper’s
facility. The storage charge is a “straight” three-tiered rate: $25
per day in areas where track congestion is most likely, $15 per
day where congestion is likely and $10 per day where congestion
is least likely. See STB Dec. 2; Verified Statement of BNSF
General Director Douglas W. Langston (Langston Statement) 9-
11. BNSF’s demurrage charge for an empty hopper car is an
“average” assessment: upon constructive placement, each car is
assigned two “credits” and for each day thereafter that the car
remains on the track, one “debit” is assessed until the shipper
orders the car delivered. At the end of each month, all of the
debits and credits for cars delivered to a particular location are
reconciled and the shipper is charged $50 for each net debit.
STB Dec. 2-3; Langston Statement 10 n.8. BNSF instituted two
policies to ease the transition to the new storage and demurrage

provided that ICC precedent applies to the STB. Ariz. Elec. Power
Coop., Inc. v. STB, 454 F.3d 359, 364 n.* (D.C. Cir. 2006).
                                  4

charge regime: (1) it agreed to waive charges for shippers that
build facilities to store their cars within the first year of the
program; and (2) it offered shippers “floating” leases of BNSF
track to store their cars, which leases permit BNSF to move the
stored cars as needed to free up track. Langston Statement 8-9,
24-25.
     In August 2001, NAFCA filed a complaint with the STB
challenging both the storage charge and the demurrage charge on
the ground that they both violate four provisions of the ICCTA:
49 U.S.C. §§ 10702(2), 11121(a), 10746 and 10745. See N. Am.
Freight Car Ass’n v. BNSF Ry., STB Docket No. 42060
(Sub-No. 1), Am. Compl. 7-8 (filed Mar. 14, 2005).3 In a
decision served January 26, 2007, the STB denied NAFCA’s
complaint. In its decision, the Board explained why railroads
had begun to extend storage and demurrage charges—
historically limited to loaded cars—to unloaded rail cars as well:
       In recent years, private car owners have increased
    their private car fleets in an attempt to have more cars
    available during seasonal and other periods of greater
    need. At times this has increased the number of empty
    private cars on the system, which has led to various
    difficulties and inefficiencies for carriers on whose
    lines the private cars sit. In response, a number of

     3
       NAFCA also filed a separate protest and petition asking the STB
to investigate the tank car storage charge as a “departure tariff,” that
is, a charge that departs from the terms of a compromise agreement
governing the mileage allowances for tank car use, as set out in
Investigation of Tank Car Allowance Sys., 3 I.C.C.2d 196 (1986),
modified, 7 I.C.C.2d 645 (1991). The Board denied the petition in
2004. See N. Am. Freight Car Ass’n—Protest & Pet. for
Investigation—Tariff Publications of the Burlington N. & Santa Fe
Ry., STB Docket No. 42060 (served Aug. 13, 2004). That denial is
not before the court.
                                 5

    railroads have begun charging shippers for holding a
    shipper’s empty private cars on their systems.
STB Dec. 2. The Board upheld BNSF’s storage and demurrage
charges, finding that they “meet both purposes for which such
charges are applied to loaded cars: they compensate the railroad
for use of its assets (i.e., the space on its track or at its yards),
and they encourage more efficient use of freight cars on its
system.” Id. at 9. The Board further concluded that such
“[p]romotion of cost recovery and efficient equipment utilization
are not unreasonable purposes.” Id.
    On March 22, 2007 NAFCA filed a petition for review.
                                 II.
    NAFCA challenges the 2001 Charges as violative of 49
U.S.C. §§ 10702(2), 10746 and 10745.4 Our review of the
Board’s decision is deferential:
         We will set aside a Board decision only if it is
    “arbitrary, capricious, an abuse of discretion, . . .
    otherwise [unlawful, or] . . . unsupported by substantial
    evidence.” 5 U.S.C. § 706(2)(A), (E). In ascertaining
    whether a railroad’s rate is reasonable, the Board is at
    the zenith of its powers and thus entitled to particular
    deference. Where the Board’s findings rest on such
    relevant evidence as a reasonable mind might accept as
    adequate to support a conclusion, and where the Board
    has articulated a rational connection between the facts
    found and the decision made, we will not disturb its
    judgment. In dealing with complex matters within its
    expertise, the Board has“wide discretion in formulating
    appropriate solutions.

     4
     NAFCA does not now argue, as it did before the STB, that the
2001 Charges violate 49 U.S.C. § 11121. See NAFCA Br. 26-61.
                                    6

PPL Mont., LLC v. STB, 437 F.3d 1240, 1244-45 (D.C. Cir.
2006) (citations and quotations omitted) (alterations in original).
Applying this standard, we address each of NAFCA’s arguments.
   A. “Unreasonable Practices” Under 49 U.S.C. § 10702
    First, NAFCA contends the STB arbitrarily concluded that
the 2001 Charges are “reasonable practices” under 49 U.S.C.
§ 10702(2). Section 10702 provides:
       A rail carrier providing transportation or service
    subject to the jurisdiction of the Board under this part
    shall establish reasonable—
              (1) rates, to the extent required by section
            10707, divisions of joint rates, and
            classifications for transportation and service it
            may provide under this part; and
              (2) rules and practices on matters related to
            that transportation or service.
On the record before us, we conclude the STB permissibly
determined that the 2001 Charges constitute reasonable practices
under section 10702(2).
     Preliminarily, NAFCA argues that the STB erred in finding
that the 2001 Charges are consistent with four congressional rail
policies set out in 49 U.S.C. § 10101.5 In its decision the STB

     5
         Section 10101 provides in relevant part:
       In regulating the railroad industry, it is the policy of the
     United States Government—
             (1) to allow, to the maximum extent possible,
           competition and the demand for services to establish
           reasonable rates for transportation by rail;
             ...
                                  7

found as follows:
    Recovering the cost of empty private car storage from
    the suppliers of those cars advances several aspects of
    the rail transportation policy, including allowing the
    demand for services to establish rates (49 U.S.C.
    10101(1)), fostering sound economic conditions in
    transportation (49 U.S.C. 10101(5)), encouraging
    efficient management of railroads (49 U.S.C.
    10101(9)), and encouraging individualized ratemaking
    (49 U.S.C. 10101(10)).
STB Dec. 7. NAFCA asserts the STB’s finding as to each of the
four listed statutory polices is arbitrary. We disagree.
     NAFCA contends the 2001 Charges do not further the first
cited policy—“to allow, to the maximum extent possible,
competition and the demand for services to establish reasonable
rates for transportation by rail,” 49 U.S.C. § 10101(1)—because
“demurrage charges are not established by ‘demand’ but, instead,
as compensation for use of a railroad car and to encourage more
prompt release of equipment.” NAFCA Br. 29. The STB,
however, based its approval of the 2001 Charges largely on the

          (5) to foster sound economic conditions in
        transportation and to ensure effective competition and
        coordination between rail carriers and other modes;
         ...
          (9) to encourage honest and efficient management
        of railroads;
          (10) to require rail carriers, to the maximum extent
        practicable, to rely on individual rate increases, and
        to limit the use of increases of general applicability;
         ....
49 U.S.C. § 10101.
                                8

increase in demand for track in recent years. As the Board
explained: “[R]ailroad conditions today are quite different from
what they were even 10 years ago. Traffic is up and capacity is
tight.” STB Dec. 6.
     Second, NAFCA asserts the 2001 Charges do not “foster
sound economic conditions in transportation,” 49 U.S.C.
§ 10101(5), relying on NAFCA’s expert testimony that they have
“just the opposite effect.” NAFCA Br. 29. The STB, however,
reached the contrary—and reasonable—conclusion that the 2001
Charges serve the important economic purposes of “eliminat[ing]
cross-subsidies,” see infra Pt. II.A.4, and “compensat[ing] BNSF
for the use of its track.” STB Dec. 6.
    Third, NAFCA argues that the 2001 Charges do not
“encourage . . . efficient management of railroads,” 49 U.S.C.
§ 10101(9), because they “provide no incentive for a railroad to
improve erratic, undependable service.” NAFCA Br. 30. This
may be so but the STB reasonably determined that the 2001
Charges do foster efficient use of track and cars in that they
“encourage shippers to utilize their private cars more efficiently
and . . . discourage them from holding empty private cars on
BNSF’s system for extended periods of time.” STB Dec. 6.
     Fourth, NAFCA contends the 2001 Charges do not
affirmatively promote the statutory goal “to require rail carriers,
to the maximum extent practicable, to rely on individual rate
increases, and to limit the use of increases of general
applicability.” 49 U.S.C. § 10101(10). According to NAFCA,
the 2001 Charges “have nothing to do with ‘individual rate
increases’ as contemplated by Section 10101(10),” which “was
designed to discourage railroads from engaging in collective
ratemaking to the extent that collective ratemaking is permissible
under the ICCTA.” NAFCA Br. 30. NAFCA offers no authority
for its narrow interpretation of section 10101(10) and the STB
read the provision more broadly—that is, also to encourage
increases that reflect the costs that each individual customer
                                 9

causes the railroad. See STB Dec. 9 (“[F]or BNSF to seek to
recover from private car suppliers the costs associated with
storing those suppliers’ empty private cars on its system . . . is
consistent with the individualized pricing principles advanced by
Congress in the Staggers Act.”). We defer to the Board’s
interpretation as consistent with the statutory language. See W.
Coal Traffic League v. STB, 216 F.3d 1168, 1171 (D.C. Cir.
2000) (where Congress’s intent is not unambiguously expressed,
court will “defer to the Board’s interpretation of the statute so
long as it is ‘based on a permissible construction of the statute’ ”
(quoting Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc.,
467 U.S. 837, 843 (1984))).
     Apart from its objections to the STB’s policy findings,
NAFCA identifies five respects in which it claims the 2001
Charges constitute an unreasonable practice in violation of
section 10702(2).
                 1. BNSF’s “Erratic” Service
     NAFCA first claims the 2001 Charges are unreasonable
because they do not reflect that BNSF’s “erratic” service
contributed both to the need for private cars and to the delay in
retrieving empty cars from BNSF’s track. We conclude that the
Board properly considered and reasonably rejected NAFCA’s
claims and evidence of erratic service.
     First, the Board found that NAFCA failed to carry its
evidentiary burden to establish that BNSF was responsible for
service variability and concluded that, “[i]n light of the
complexity and variety of many private car movements, it would
be inappropriate to hold that a railroad’s tariffs are unlawful
because they do not penalize the railroad for service variability
unrelated to fault.” STB Dec. 12 (citing Capitol Materials, Inc.,
STB Docket No. 42068, slip op. at 7, 2004 WL 771676, at *6
(served April 12, 2004) (“[G]iven the many variables outside a
railroad’s control that may affect delivery . . . a railroad cannot
                                10

reasonably be expected always to be able to meet an ideal
delivery timetable.”)). The Board’s conclusion was not, as
NAFCA first maintains, contrary to precedent.
     Regarding precedent, neither this court nor the STB has
adopted a presumption, as NAFCA suggests, that variations in
train service are the fault of the railroad or that the railroad
should necessarily bear their costs. Instead, the decisions make
manifest that the question of fault is fact-specific. See Dana
Corp. v. ICC, 703 F.2d 1297, 1305 (D.C. Cir. 1983) (holding
ICC “must permit the shippers to show that, in particular
instances, the idle-car time for which charges are assessed is
attributable to the fault of the carriers”); Prince Mfg. Co. v.
Norfolk & W. Ry., 356 I.C.C. 702, 705 (1978) (“[J]ustification
for relief [from demurrage fees] depends upon the particular
exigencies in each case.”); Ormet Corp. v. Ill. Cen. R.R., 341
I.C.C. 647, 650-51 (1972) (“[J]ustification for relief depends
upon varying circumstances.”). Further, both this court and the
Board have indicated the burden is on a complaining shipper to
show that demurrage fees are excessive in a particular instance
because of some fault on the railroad’s part. In Dana Corp., for
example, we overturned the ICC’s decision and remanded to the
Commission specifically to permit “the shippers to show” the
demurrage charges were “attributable to the fault of the carriers.”
703 F.2d at 1305 (emphasis added). In Cities Service Oil Co. v.
Soo Line Railroad, 356 I.C.C. 838, 842 (1977), the ICC declared
that a complainant bears “the burden of establishing by
competent evidence” that challenged demurrage charges are
“unjust and unreasonable” and dismissed the complaint seeking
waiver of the charges because the shipper failed to satisfy its
burden. Here, the STB reasonably concluded that NAFCA did
                                11

not meet its burden because it offered no evidence that particular
variations in service were BNSF’s fault.6 See STB Dec. 12-13.
     With regard to the need for private cars, the Board
specifically found it was caused largely by fluctuations in
demand: “In recent years, private car owners have increased their
private car fleets in an attempt to have more cars available during
seasonal and other periods of greater need.” STB Dec. 2. This
finding was supported by substantial evidence in the record. See
Verified Statement of CHS, Inc. Vice President Dan Mack
(Mack Statement) ¶ 8 (shippers furnish their own general
purpose covered hopper cars because railroads do not provide
sufficient cars “to meet all levels of demand”); Verified
Statement of Archer Daniels Midland Co. Senior Vice President
Randy Neumayer (Neumayer Statement) ¶ 3 (company acquires
private cars to be assured its grain processing and flour milling
facilities “receive a sufficient and timely supply of raw
materials” and because cars are “essential to meet ADM’s
commitments to its customers, who often lack storage capacity
or receive non-fungible commodities that cannot be
commingled”); Verified Statement of Bunge North America, Inc.
Vice President Darrell R. Wallace (Wallace Statement) ¶ 7
(company-owned hopper cars are “essential” because of varying
market requirements); see also STB Dec. 12-13.
     As for the delayed retrieval of cars, the Board pointed out
that NAFCA did not explain why particular shippers “are not
prepared to receive their empty cars before charges accrue.”
STB Dec. 13. The Board noted that shippers “have the ability to
track their cars, but they have not shown that they have done so”

     6
     Placing the burden on the complaining shipper is consistent with
the Commission’s general rule that the complainant has the burden to
show that a practice is “unreasonable” under section 10702. See
Aluminum Co. of Am. v. St. Louis-S.F. Ry. Co., 364 I.C.C. 137, 143
(1980).
                                12

and that “[e]ven without tracking their cars, private agricultural
hopper car owners are given an average of 2 days to accept their
empty private cars without charge,” which, the Board noted, is
adequate free time for “the vast majority of private car owners”
who “do not incur demurrage or storage charges.” Id.
     Finally, even had NAFCA offered evidence of particular
instances of railroad fault, it was not unreasonable for the Board
to conclude that the fact “that a shipper might suffer hardship
from a service failure at a particular location or particular
locations does not warrant overturning the railroad’s entire
storage or demurrage program, as there are other remedies
available for that situation.” Id. n.46 (noting Dana Corp.
allowed shippers “to show that, in particular instances, the
idle-time for which charges are assessed is attributable to the
fault of the carriers” (emphasis added)). Specifically, the Board
pointed out that it is “available to hear [shippers’] complaints” in
the “rare” instance where the railroad and the shipper cannot
resolve a particular demurrage dispute. Id. n.47.
               2. Proportionality of “Penalties”
     Relying on Consolidated Rail Corp. v. ICC, 646 F.2d 642
(D.C. Cir. 1981), NAFCA next asserts the 2001 Charges’ short
free time periods are “more costly measures than are necessary”
to correct the asserted problem of track congestion. NAFCA Br.
38. In Consolidated Rail, the court upheld the ICC’s decision
cancelling a tariff that required a shipper to pay for expensive
“special train service” to transport hazardous radioactive
materials—a requirement the ICC found was “unnecessary and
wasteful.” 646 F.2d at 643. The ICC determined that “ ‘[a]ll
available evidence support[ed] the finding that . . . use of special
trains provide[d] no cognizable safety benefit’ ” and therefore
found, “ ‘based on the evidence at hand, the special train
requirement’ ”—which was “ ‘several times as costly as regular
service without (any) commensurate safety benefits’ ”—was
“ ‘wasteful transportation and an unreasonable practice in
                                13

violation of Section 10701(a) of the [Interstate Commerce
Act].’ ” Id. at 645 (quoting Trainload Rates on Radioactive
Materials, E. R.R., 362 I.C.C. 756, 773 (served May 2, 1980)).
We explained that the ICC “based this factual determination
primarily on evidence it drew from its previously issued
Environmental Impact Statement,” which “specifically addressed
the relative safety of [special train service] and regular trainload
service for radioactive material.” Id. Accordingly, we held that
“the ICC acted properly in determining, on the record before it,
that the use of special train service was unnecessary,” id. at 643,
observing that the railroads there “failed to present evidence
sufficient to rebut” the presumption (arising from the regulatory
regime there7) that “heavy additional expenditures by the
railroads . . . were . . . unnecessary and hence unreasonable,” id.
at 656.
    In this case, the STB likewise “acted properly” in
concluding that NAFCA, which bore the burden of showing
unreasonableness, see Aluminum Co. of Am. v. St. Louis-S.F. Ry. Co.,
364 I.C.C. 137, 143 (1980), failed to prove its claim. NAFCA
asserts it is unreasonable to impose demurrage charges after as
few as 25 hours (or even an average of two days) of free time
when the problem is cars remaining on track “for ‘extended
periods of time’ exceeding 30 days per car.” NAFCA Br. 40
(quoting STB Dec. 6). This argument misconstrues the record.
Before the Board, BNSF noted that 2,686 empty private cars
were on its tracks for more than thirty days on April 30, 2001,
simply as an “example” of the extent of the problem. See BNSF

     7
     In Consolidated Rail, the U.S. Department of Transportation and
the Nuclear Regulatory Commission had established “complete and
comprehensive” safety standards “pursuant to specific statutory
authority.” 646 F.2d at 650. We concluded that a presumption arose
that a safety expenditure not specified in the regulations was
unnecessary and unreasonable. Here, there is no basis for a similar
presumption.
                                14

Reply Statement of Fact & Argument 15 n.3 (citing Langston
Statement 5). In its decision, the STB relied on this figure, along
with others, not, as NAFCA suggests, to establish a benchmark
but rather to contrast the time cars sat empty on BNSF’s tracks
before and after the 2001 Charges were imposed. See STB Dec.
10. Neither the STB nor BNSF indicated that cars remaining on
the tracks for shorter periods of time were not also problematic.
Nor was the STB required to adopt the five-day free time period
NAFCA proposed based on NAFCA’s bare allegation that
“BNSF’s avowed goal of curbing ‘long term’ storage of empty
private cars on BNSF track clearly can be satisfied with five
days’ free time.” NAFCA Rebuttal Statement 71. NAFCA
offered no evidence to establish that a five-day period is
necessarily more reasonable than two days (or any other specific
time period).
         3. Disparate Treatment of Private Shippers
     NAFCA also asserts the 2001 Charges are unreasonable
because they discriminate against private car shippers in favor of
shippers using railroad-owned cars. According to NAFCA,
“BNSF will hold its own cars indefinitely at no charge for
shippers who order them for loading, but requires private car
shippers to accept or order their empty cars within as little as 25
hours after arrival of the cars, or face steep penalties.” NAFCA
Br. 41. In its decision, the Board responded that where a
difference in treatment exists, namely, for railroad-owned cars in
the “C” pool designation—i.e., those which “are generally
associated with a particular station and may in fact be used by
multiple shippers,” STB Br. 29-30 n.26 (citing Langston
Statement 70)— the cars “may be moved by the railroad to limit
congestion.” STB Dec. 15.8 We find this explanation for the

     8
      According to the STB (and NAFCA does not dispute this), other
railroad-owned cars, which are assigned exclusively to a single
shipper, “are treated no more favorably than private cars.” STB Dec.
                                  15

varying treatment reasonable. NAFCA argues that in reality
98% of the time BNSF does not move the C pool cars, NAFCA
Br. 41-42 (citing NAFCA Rebuttal Statement 61), but this fact
does not vitiate the STB’s rationale. It remains true that BNSF
can and does move C pool cars as needed to free up track and in
the future may do so more frequently as demand or congestion
requires.
                     4. Cross-Subsidization
     NAFCA further argues the 2001 Charges are unreasonable
because they force private car shippers to subsidize shippers who
use railroad cars because private shippers pay twice for the use
of BNSF track: once through the freight rates they pay and a
second time via the 2001 Charges. The STB, however, agreed
with BNSF that “prior to the 2001 Charges, all other shippers
were cross-subsidizing private car owners for the cost of holding
empty private cars for extended periods on the BNSF system.”
STB Dec. 6. As the Board explained:
    Storing empty private cars imposes costs on the
    railroad, including the loss of system fluidity and the
    opportunity cost associated with using track for
    long-term car storage that instead could be used to
    facilitate the efficient movement of freight. The 2001
    Charges recover costs from those that generate them.
Id. (footnote omitted).9 Thus, according to the Board, the 2001

15 (citing BNSF Reply Statement 68-75).
     9
      NAFCA argues the STB erred in not addressing the testimony
of NAFCA’s expert witness that “the 2001 Charges do not represent
‘unbundling’ in an economic sense” because “[t]rue unbundling is
designed to provide a buyer with an option that offers a lower price for
the product when it features fewer accessories and components, but
BNSF is offering no lower price to shippers so that they might obtain
                                  16

Charges eliminated rather than effected cross-subsidization. The
Board’s analysis is both logical and reasonable. In rejecting
NAFCA’s argument, the Board noted that NAFCA offered no
evidence that the line haul rates before the 2001 Charges
“included the cost of storing empty private cars for any particular
length of time or that they included all such costs.” STB Dec.
7.10
                 5. More Efficient Rail Service
     Finally, NAFCA argues the 2001 Charges are unreasonable
because they have not, as the STB claimed, resulted in more
efficient rail service. On this subject, the STB found:
    [I]n May 2001 empty private industrial cars sat on
    BNSF’s track for an average of 2 days after
    constructive placement. By contrast, in July 2005, the
    average was less than half a day. And in May 2001,
    empty private agricultural cars sat on BNSF’s track for
    an average of one and one-third days, whereas in July
    2005, the average was two-fifths of a day. Further,
    BNSF shows that billings for empty private cars sitting

holding track from another source.” NAFCA Br. 44. But the STB did
not rely on an unbundling theory and it adequately explained why it
believed that the 2001 Charges promoted individualized pricing by
requiring each shipper to shoulder the cost of storing its cars on BNSF
track.
     10
       Alternatively, the Board asserted that, “even if prior rates did
fully incorporate the costs of indefinitely storing empty private
cars . . . , BNSF demonstrates that the practices of the owners and
users of private cars in recent years have put increasing burdens on the
carrier’s infrastructure and operations, and under the law, BNSF may
raise the price for its services, as long as the total amount paid is
reasonable.” STB Dec. 7 (footnote omitted) (noting also that NAFCA
“do[es] not here challenge the reasonableness of any line-haul rates”).
                               17

    on its track beyond the allowed free period have
    dropped consistently every year since 2001—from
    $12.5 million in a six-month period in 2001, to $11.2
    million in 2002, to $6.8 million in 2003, to $4.7 million
    in 2004. Indeed, Complainants admit that the 2001
    Charges may well have “caused many shippers to
    endeavor to order empty private cars from BNSF track
    into shipper loading tracks more quickly than before the
    changes took effect”—the very effect the 2001 Charges
    were intended to produce.
STB Dec. 10 (footnotes omitted) (quoting NAFCA Opening
Statement of Fact and Argument (NAFCA Opening Statement)
30). NAFCA does not dispute the Board’s “reduction” findings,
which are supported by record evidence. NAFCA does,
however, contest the Board’s determination that the reductions
show the 2001 Charges have been effective.
     First, NAFCA claims that the reduction in post-placement
holding time for agricultural hopper cars is only twelve hours
and summarily asserts that such a short reduction “is not
sufficient to assure more prompt physical removal of the car
from BNSF track even where BNSF provides daily switching.”
NAFCA Br. 47 (citing NAFCA Rebuttal Statement 26-27 (citing
Wallace Rebuttal Verified Statement ¶ 9)). NAFCA references
its argument before the Board that “a reduction in the time
between the commencement and termination of constructive
placement” does not necessarily result in “a commensurate
reduction in the time that empty private cars sat on BNSF track”
because “BNSF does not necessarily remove an empty private
car from BNSF track and place it for loading as soon as, or even
on the same day as, BNSF receives the shipper’s placement
order.” NAFCA Rebuttal Statement 25-26. The Board found,
however, (and NAFCA concedes) that there was a decrease in
the total time the car “sat” on the track after constructive
placement—both before and after the shipper orders the car
                                18

delivered. STB Dec. 10; Langston Statement 13 (“The charts
clearly show that since the storage policy was first adopted, the
average time that private cars are left on BNSF’s tracks has
decreased by over one full day for industrial privates and by
roughly half a day for agricultural privates.” (citing id. exs. E,
F)) (emphasis added); NAFCA Br. 47. As NAFCA offers no
basis to believe the lag time to which it refers (between the
shipper’s order to deliver its car and the car’s actual movement)
decreased since 2001, it is logical to infer the reduction in total
time reflects a decrease in the time before the shipper orders
delivery.11
     Second, NAFCA argues that the reduction in demurrage fees
since 2001 is illusory because of a corresponding increase over
the same period in payments to BNSF under the floating track
leases. NAFCA claims that the “only change was that the empty
private cars remained on the same BNSF track as prior to the
2001 Charges, with BNSF now collecting lower demurrage
charges but higher track rentals.” NAFCA Br. 47-48. Even if
there has been no net reduction in the number of empty cars on
BNSF’s tracks, nonetheless there has been an increase in
efficiency because, as the Board noted, the leased space is “in
less congested areas” and the leases “permit BNSF to move and
store cars where they will cause the least disruption.” STB Dec.
11 & n.32; see Langston Statement 25.
          B. Section 10746: Demurrage Charge Statute
    NAFCA also contends that the 2001 Charges violate 49
U.S.C. § 10746. Section 10746 provides:

     11
       That there was little or no improvement in BNSF’s on-time
performance or average train velocity, as NAFCA asserts, does not
negate the other evidence showing the 2001 Charges have been
effective.
                                19

      A rail carrier providing transportation subject to the
    jurisdiction of the Board under this part shall compute
    demurrage charges, and establish rules related to those
    charges, in a way that fulfills the national needs related
    to—
            (1) freight car use and distribution; and
             (2) maintenance of an adequate supply of
          freight cars to be available for transportation
          of property.
NAFCA asserts the 2001 Charges violate this statute in two
respects.
                   1. Lack of “Error Relief”
     NAFCA first asserts the 2001 Charges do not fulfill the
statute’s two objectives because they do not provide shippers
with adequate relief for “bunching,” i.e., “deliveries not
reasonably timed or spaced,” STB Dec. 13, or other delays
caused by BNSF’s erratic service. NAFCA complains that
BNSF’s “straight” tank car storage plan (which assesses a flat
daily storage charge) provides for only limited relief from
storage charges accrued as a consequence of erratic service such
as bunching12 and that BNSF’s average hopper demurrage plan
provides for no “error relief” at all in such circumstances.
NAFCA Br. 50. At a minimum, NAFCA asserts, in light of the
discrepancies between the straight plan and the average plan,
hopper car users should be permitted to choose between the two.
The STB rejected this argument, explaining that “BNSF’s
straight private car storage program does allow for relief from
bunching that occurs as a result of an act or neglect of BNSF,”

     12
       BNSF’s straight plan permits a shipper to submit a claim for
relief from erroneously assessed charges (“error relief”), including
those caused by bunching. See Mack Statement App. B-2, at 4-5.
                               20

STB Dec. 13 & n.45, and that “it is not unusual for average
demurrage plans to exclude or limit relief for bunching, in light
of the benefit of the averaging afforded under such plans,” id. at
13 (footnote omitted) (citing Capitol Materials, Inc., STB
Docket No. 42068, slip op. at 7, 2004 WL 771676, at *6 (served
April 12, 2004)). We find no error in the Board’s decision to
uphold the storage and demurrage plans at issue notwithstanding
the limited availability of relief thereunder.
     First, given the longstanding practice of not providing error
relief under an average demurrage plan, BNSF’s failure to offer
such relief under its average plan is neither surprising nor
arbitrary. See Ill. Cent. Gulf R.R. v. ICC, 702 F.2d 111, 114 (7th
Cir. 1983) (“ ‘[R]ecent cases . . . have been uniform in their
adherence to the policy that penalty demurrage should not be
excused where an average agreement is in effect.’ ” (alteration
in original) (quoting Cleveland Elec. Illuminating Co. v. ICC,
685 F.2d 170, 174 (6th Cir. 1982); citing Empire-Detroit Steel
Div. v. ICC, 659 F.2d 396, 398 (3d Cir. 1981); Monongahela
Power Co. v. ICC, 640 F.2d 504 (4th Cir. 1981)); Capitol
Materials, Inc., 2004 WL 771676, at *2 (“Unlike ‘straight’
demurrage—under which no credits are available for early
release of cars but relief can be available for problems such as
‘bunching’ . . . —under an average demurrage agreement the
shipper is excused from demurrage charges only if a car is
delayed by an extraordinary event like a flood, earthquake,
tornado or hurricane.”).
     More fundamentally, contrary to NAFCA’s assertion, there
is no legal requirement that a demurrage charge provide “error
relief” or that a shipper be afforded the option to choose between
a straight and an average plan. In Field Container Corp. v. ICC,
712 F.2d 250 (7th Cir. 1983), on which NAFCA relies for the
latter proposition, the Seventh Circuit did not impose such a
requirement but simply upheld an average demurrage charge the
shipper had voluntarily agreed to in lieu of the default straight
                                 21

demurrage charge, noting that under the terms of the tariff, “[a]
railroad [could ]not force a shipper into the average agreement”
and “no shipper [was] coerced to adopt the average agreement;
it [was] his choice.” Id. at 255-56.
     What the law does require, as we have already observed, is
that a shipper be allowed to demonstrate before the Commission
that erratic service is the fault of the railroad and that the shipper
should therefore not be assessed a charge for idle track time
caused thereby. See Dana Corp., 703 F.2d at 1305. In this case,
the Board reasonably found NAFCA did not carry its burden.
The bunching evidence consists of testimony by shippers’
officers that there is wide variation in transit times for their cars.
See Neumayer Statement ¶ 6; Verified Statement of Ag
Processing Inc. Senior Vice President Terry J. Voss ¶¶ 5-8;
Wallace Statement ¶ 9. As we have already concluded, the
Board reasonably found NAFCA failed to carry its burden to
show that such service variance—much less bunching in
particular—was attributable to BNSF. As the Board noted,
NAFCA did “not make any specific claims of bunching” and the
Board reasonably found that NAFCA’s “general claim of
possible harm” was “too vague to permit [the Board] to find an
otherwise valid tariff unlawful.” STB Dec. 13.
                     2. Statutory Findings
     NAFCA asserts the Board also violated section 10746 by
failing to make an affirmative finding that the 2001 Charges
promote the second objective set out in the statute —namely, that
BNSF’s demurrage charges be computed “in a way that fulfills
the national needs related to . . . (2) maintenance of an adequate
supply of freight cars to be available for transportation of
property.” 49 U.S.C. § 10746(2). In fact, NAFCA claims to
have “establish[ed] a prima facie failure of the 2001 Charges to
promote an adequate supply of freight cars in derogation of the
Section 10746 goals” because NAFCA’s “undisputed evidence
shows that private freight cars are necessary in order to meet the
                                 22

commercial needs of BNSF shippers who do not receive an
adequate supply of cars from BNSF, and that one of the goals of
the 2001 Charges was to reduce the number of private cars
operated by shippers.” NAFCA Br. 55-56. As evidence of
BNSF’s purportedly improper “goal,” NAFCA appears to rely on
a single sentence in an internal BNSF policy document
addressing the 2001 Charges: “The need for a comprehensive
private equipment policy has arisen from operational constraints
that warrant BNSF to introduce a tool which will provide us a
lever into the sizing of on-line privately supplied equipment
fleets.” NAFCA Opening Statement Ex. 9; see NAFCA Opening
Statement 28. The quoted sentence, however, indicates only that
BNSF desired to reduce the number of private cars on its track
(which BNSF freely admits) and not, as NAFCA suggests, that
BNSF sought to reduce the number to an inadequate level.13
Further, the Board made an affirmative finding there was no
“evidence that the 2001 Charges have made, or are likely to
make, the freight car supply inadequate.” STB Dec. 11. In the
absence of any evidence to the contrary (and NAFCA cites
none), the Board’s finding satisfies its section 10746(2)
obligation, if any, to make an express finding.
                        C. Section 10745
    Finally, NAFCA argues that BNSF’s failure to compensate
shippers for storing their cars violates 49 U.S.C. § 10745, which,
NAFCA asserts, requires such compensation. We conclude the
STB reasonably determined there is no section 10745 obligation.

     13
      In fact, on the same page, the policy document identifies one of
the demurrage policy’s benefits as “[p]rovid[ing] leverage for BNSF
to have private owners/lessors properly size their fleets.” NAFCA
Opening Statement Ex. 9 (emphasis added).
                                  23

    Section 10745 provides:
         A rail carrier providing transportation or service
    subject to the jurisdiction of the Board under this part
    may establish a charge or allowance for transportation
    or service for property when the owner of the property,
    directly or indirectly, furnishes a service related to or an
    instrumentality used in the transportation or service.
    The Board may prescribe the maximum reasonable
    charge or allowance a rail carrier subject to its
    jurisdiction may pay for a service or instrumentality
    furnished under this section. The Board may begin a
    proceeding under this section on its own initiative or on
    application.
To the extent the statute may require that a railroad compensate
shippers under some circumstances, the STB reasonably
determined that the statute does not apply to shippers that
provide their own storage for cars.14

     14
       Thus, we need not and do not decide whether section 10745
imposes an affirmative obligation on a railroad to establish a charge
or allowance for transportation service furnished by a shipper.
NAFCA contends that, “[a]lthough [the language of section 10475]
appears on the surface to be precatory, the case law establishes that it
is actually mandatory,” quoting Bud Antle, Inc. v. United States, 593
F.2d 865, 872 (9th Cir. 1979) (“If a ‘shipper legitimately performs a
service, it is entitled, under the plain terms of [then-49 U.S.C. App.
§ 15(15)], to be paid by the carrier a just and reasonable
allowance.’ ”). NAFCA Br. 56 (quotation omitted). The statute at
issue in Bud Antle, since repealed, presumed the existence of a charge
or allowance and mandated that it be published and be reasonable:
     “If the owner of property transported under this chapter
     directly or indirectly renders any service connected with
     such transportation, or furnishes any instrumentality used
     therein, the charge and allowance therefor shall be
     published in tariffs or schedules filed . . . and shall be no
                                   24

     In its decision, the Board explained its interpretation of
section 10745 as follows:
    A shipper constructing its own storage space for storage
    of its own idle cars is not furnishing a rail carrier an
    instrumentality used in the transportation of freight, nor
    is it providing a service related to such transportation.
    See 49 U.S.C. 10102(9)(B) (identifying, as within the
    meaning of “transportation,” services including storage
    of goods being shipped, but not storage of rail cars).
    Rather, it is assuming, as it should, a cost associated
    with the fleet-sizing decisions that the shipper itself has
    made.
STB Dec. 15. We believe the Board’s distinction—between an
instrumentality or service directly related to the actual movement
of freight when in transit, such as storing goods before delivery,
and one that is not so directly related, such as “storing” a private
car once it is emptied of its freight—reflects a permissible
interpretation of the statutory phrase “a service related to or an
instrumentality used in the transportation or service related to
movement” and is therefore entitled to deference. See Ass’n of
Am. R.Rs. v. STB, 237 F.3d 676, 680 (D.C. Cir. 2001).

     more than is just and reasonable, and the Commission may,
     after hearing on a complaint or on its own initiative,
     determine what is a reasonable charge as the maximum to be
     paid by the carrier or carriers for the services so rendered or
     for the use of the instrumentality so furnished, and fix the
     same by appropriate order . . . .”
593 F.2d at 869 (quoting 49 U.S.C. § 15(13), repealed by Pub. L. No.
95-473, § 4(b), 92 Stat. 1466 (1980)) (emphases added). Current
section 10745, by contrast, simply provides that a “rail carrier . . . may
establish a charge or allowance.” (Emphasis added.) Given the
differences between the two statutes, we decline to hold that section
10745 requires that a charge or allowance be imposed.
                                 25

     NAFCA now argues the STB erred in relying on subsection
(9)(B) of the statute while ignoring subsection (9)(A), which
defines “transportation” to include “a locomotive, car, vehicle,
vessel, warehouse, wharf, pier, dock, yard, property, facility,
instrumentality, or equipment of any kind related to the
movement of passengers or property, or both, by rail, regardless
of ownership or an agreement concerning use.” 49 U.S.C.
§ 10102(9)(A). NAFCA contends the area in which a private
shipper stores its rail cars necessarily comes within the definition
because it is a “yard, property, facility [or] instrumentality . . .
related to the movement of . . . property . . . by rail.” We believe,
however, that the distinction the Board drew in construing
subsection (B) applies equally to subsection (A), which uses
similar language in its requirement that, to qualify as
“transportation,” the storage facility must be “related to the
movement of passengers or property, or both, by rail,” and which
may, as with subsection (9)(B), reasonably be interpreted to
exclude storage of rail cars no longer moving goods.

    For the foregoing reasons, the petition for review is denied.

                                                        So ordered.