American Shipper Shippers' NewsWire 11/10/04

Supreme Court rules “Himalaya” clause protects railroad

In a decision rendered more quickly than anticipated, the U.S. Supreme Court ruled unanimously in the case of “Norfolk Southern vs. James. N. Kirby Pt Ltd.” that a railroad, as a participant in multimodal carriage, is entitled via a “Himalaya” clause to an ocean carrier’s bill of lading liability limitation under the Carriage of Goods by Sea Act (COGSA).

The decision means Norfolk Southern, which had faced a possible maximum $1.5 million tab after a train derailment in which 10 containers of machinery were damaged during the land portion of an international shipment, is likely to be liable only for $5,000, or 10 times COGSA’s $500-per-package limitation of liability, each container being considered one package.

“A single Himalaya Clause,” which extends an ocean carrier’s liability protections to its agents, “can cover both sea and land carriers downstream … confusion and inefficiency will inevitably result if more than one body of law governs a given contract’s meaning,” wrote Justice Sandra Day O’Connor, who delivered the high court’s opinion.

“Under a conceptual rather than spatial approach, the fact that the bills (of lading) call for the journey’s final leg to be by land does not alter the contracts’ essentially maritime nature,” O’Connor said.

“When an intermediary contracts with a carrier to transport goods, the cargo owner’s recovery against the carrier is limited by the liability limitation to which the intermediary and carrier agreed,” she wrote.

“The intermediary (meaning non-vessel-operating common carrier) is not the cargo owner’s agent in every sense, but it can negotiate reliable and enforceable liability limitations with carriers it engages,” O’Connor wrote for the full court, which heard oral arguments in this case Oct. 6

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American Shipper Shippers' NewsWire  11/12/04

U.S. intermodal traffic still booming

The Association of American Railroads reported that intermodal freight carried by major U.S. railroads increased 11 percent to 233,559 trailers or containers in the week ended Nov. 6, from the year-earlier period.

This was the second highest weekly intermodal total ever, trailing only the week ended Oct. 30.

Containers carried by major railroads rose 12 percent to about 168,000 units in the week ended Nov. 6, while trailers increased 9 percent to about 65,000 units.

During the first 44 weeks of 2004, major U.S. railroads handled an intermodal volume of 9.3 million trailers or containers, up 10 percent.

Total carloads moved by major railroads increased 2 percent to about 343,000 units in the week ended Nov. 6, with volume up 3.7 percent in the West and 0.8 percent in the East.

"Freight traffic on the nation's railroads continued to run well ahead of year earlier levels," the association said.

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CN, CPR and Norfolk Southern announce agreement to improve freight service between Eastern Canada and US
10 Nov 2004, CTL

CN, Canadian Pacific Railway (CPR) and Norfolk Southern Railway (NSR) have announced an agreement that will significantly improve freight service between Eastern Canada and the Eastern United States, say the companies.

The three-party arrangement will give CN and NSR a seamless, direct north-south routing over CPR's lines south of Montreal that will slice as much as two days' transit time off some 20,000 annual shipments. It will also increase freight traffic density and revenues on CPR's wholly owned subsidiary, the Delaware and Hudson Railway.

"This three-railroad agreement will benefit both customers and railroads. First, it will offer CN's existing merchandise carload customers in Quebec and the Maritimes quicker access to important consuming markets in the Eastern United States. And second, it will enable the participating railroads to improve the utilization of their networks and locomotive and car fleets," said E. Hunter Harrison, president and chief executive officer of CN.

Implementation is scheduled to begin Nov. 19, 2004. CN-NSR traffic destined for the Eastern U.S. will move in CPR trains on CPR's line between Rouses Point, N.Y. and Saratoga Springs, under a freight haulage arrangement between CPR and NSR. This CN-NSR traffic will then move in NSR trains over CPR's line between Saratoga Springs and the NSR connection near Harrisburg, Pa., under a trackage rights agreement between CPR and NSR. The new agreement will cut 330 miles off the current routing used by CN and NSR, which sees freight traffic handled more circuitously through the Buffalo, N.Y. gateway.

"We continue to identify and implement efficiencies benefiting shippers throughout North America. This agreement demonstrates our commitment to aggressively pursue opportunities to improve service," said David R. Goode, chairman and chief executive officer of NSR.

"This is an important initiative that takes costs out of the rail industry by placing freight traffic on the most efficient routing without regard to ownership. It also creates a significant source of new earnings for our Delaware and Hudson subsidiary and is another major milestone in improving the profitability and value of this part of our network," said Rob Ritchie, president and chief executive officer of CPR.