Grupo México, S.A.B. de C.V. and GMéxico Transportes, S.A.B. de C.V.-Acquisition of Control Exemption-CG Railway, LLC, 65965-65967 [2024-18030]

Download as PDF lotter on DSK11XQN23PROD with NOTICES1 Federal Register / Vol. 89, No. 156 / Tuesday, August 13, 2024 / Notices submitting an application or using an exemption. Also, registered brokers must submit annual reports regarding all brokering activities that were transacted, and registered manufacturers and exporters must maintain records of defense trade activities for five years. • 1405–0003, Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data: In accordance with part 123 of the ITAR, any person who intends to permanently export unclassified defense articles or unclassified technical data must obtain DDTC approval prior to export. The ‘‘Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data’’ (Form DSP–5) is the licensing vehicle typically used to obtain permission for the permanent export of unclassified defense articles, including unclassified technical data covered by the U.S. Munitions List (USML). This form is an application that, when approved, signed and dated by an official of DDTC, serves as the applicant’s authorization for the permanent export of unclassified USML articles. • 1405–0013, Application/License for Temporary Import of Unclassified Defense Articles: In accordance with part 123 of the ITAR, any person who intends to temporarily import unclassified defense articles must obtain DDTC authorization prior to import. The ‘‘Application/License for Temporary Import of Unclassified Defense Articles’’ (Form DSP–61) is the licensing vehicle typically used to obtain permission for the temporary import of unclassified defense articles covered by the USML. This form is an application that, when completed and approved by DDTC, it constitutes the official record and authorization for the temporary commercial import of unclassified USML articles, pursuant to the AECA and the ITAR. • 1405–0023, Application/License for Temporary Export of Unclassified Defense Articles: In accordance with part 123 of the ITAR, any person who intends to temporarily export unclassified defense articles must obtain authorization from DDTC prior to export. The ‘‘Application/License for Temporary Export of Unclassified Defense Articles’’ (Form DSP–73) is the licensing vehicle typically used to obtain permission for the temporary export of unclassified defense articles covered by the USML. This form is an application that, when completed and approved by DDTC, it constitutes the official record and authorization for the temporary commercial export of VerDate Sep<11>2014 17:55 Aug 12, 2024 Jkt 262001 unclassified USML articles, pursuant to the AECA and the ITAR. • 1405–0092, Application for Amendment to License for Export or Import of Unclassified Defense Articles and Related Unclassified Technical Data: In accordance with part 123 of the ITAR, any person who intends to permanently export, temporarily import, or temporarily export unclassified or classified defense articles or related technical data must obtain DDTC authorization. This information collection is used by private industry to make changes in an approved Form DSP–5, Form DSP–61, or Form DSP–73. Upon approval, the amendment form along with the original license constitutes the authority to export or temporarily import. Methodology: This information collection may be sent to DDTC via the following methods: electronically or by mail. Michael J. Vaccaro, Deputy Assistant Secretary for Defense Trade Controls, U.S. Department of State. [FR Doc. 2024–17948 Filed 8–12–24; 8:45 am] BILLING CODE 4710–25–P SURFACE TRANSPORTATION BOARD [Docket No. FD 36780] Grupo México, S.A.B. de C.V. and GMéxico Transportes, S.A.B. de C.V.— Acquisition of Control Exemption—CG Railway, LLC On May 15, 2024, GMéxico Transportes, S.A.B. de C.V. (GMXT), a noncarrier railroad holding company, filed a petition under 49 U.S.C. 10502 for exemption from the prior approval requirements of 49 U.S.C. 11323–24 to allow GMXT to acquire an indirect controlling ownership interest in CG Railway, LLC (CGR), a Class III carrier.1 The Board will grant the petition for 1 The petition identifies GMXT as the entity seeking Board authority to acquire a controlling ownership interest in CGR. However, because Grupo México, S.A.B. de C.V. (Grupo México) is the ultimate parent company of GMXT, this proceeding has been recaptioned to include Grupo México. GMXT and Grupo México are collectively referred to as Petitioners. GMXT’s initial petition, filed in Docket No. FD 36701, was rejected as incomplete and for failing to provide adequate supporting information. See GMéxico Transportes, S.A.B. de C.V.—Acquis. of Control Exemption—CG Ry. (April 2024 Decision), FD 36701, slip op. at 2–4 (STB served Apr. 4, 2024). The Board also required CGR and its owners to respond to questions concerning, respectively, authorization for CGR’s current operations and for the transaction in which they acquired CGR. Id. at 4–5; see also infra notes 3 & 4. PO 00000 Frm 00130 Fmt 4703 Sfmt 4703 65965 exemption, subject to standard employee protective conditions. Background CGR is wholly owned by Golfo de México Rail Ferry Holdings LLC, a 50/ 50 joint venture (JV) between Seacor Holdings, Inc. (through its wholly owned subsidiary, Rail Ferry Investment Holdings Inc.) (Seacor) and Genesee & Wyoming, Inc. (through its wholly owned subsidiary, G&W Agave Holdings Inc.) (GWI).2 (Pet. 2–3.) CGR provides rail carrier service in the Port of Mobile, Ala., and rail ferry service between the Port of Mobile and the Port of Coatzacoalcos, Mexico, where the rail ferry operation connects to the Ferrosur Railway, a rail carrier subsidiary of GMXT located in Mexico.3 (Pet. 3.) GMXT, a subsidiary of Grupo México (a noncarrier holding company), controls, through indirect ownership, Florida East Coast Railway, L.L.C. (FECR), a Class II carrier in Florida, and Texas Pacifico Transportation, Ltd. (Texas Pacifico), a Class III carrier in Texas.4 (Pet. 3); see Grupo México, S.A.B. de C.V.—Control Exemption— Fla. E. Coast Holdings Corp., FD 36109, slip op. at 1 (STB served May 9, 2017). As explained in the petition, FECR and Texas Pacifico are in the same corporate family as the Copper Basin Railway, Inc., a Class III carrier in Arizona that Grupo México controls through a different indirect subsidiary, ASARCO LLC. (Pet. 3–4).5 2 In response to questions raised in the April 2024 Decision in Docket No. FD 36701, GWI and Seacor jointly submitted a letter explaining that neither GWI nor Seacor ‘‘controlled’’ CGR within the meaning of 49 U.S.C. 10102(7) and 11323(a) due to their 50/50 ownership split and provisions in the agreement governing the JV requiring that decisionmaking authority is shared equally between the parties. See Letter, May 7, 2024, GMéxico Transportes, FD 36701. In the absence of any countervailing evidence, the Board finds this explanation satisfactory and supported by the agreement governing the JV. 3 Following the April 2024 Decision in Docket No. FD 36701, CGR obtained after-the-fact authority to operate the rail ferry service between the Port of Mobile and the U.S. maritime boundary line in the Gulf of Mexico. See CG Ry.—Operation Exemption—Rail Ferry Serv., FD 36775 (STB served May 23, 2024). It had previously sought and received authority to operate certain tracks within the Port of Mobile, but not to operate the broader ferry service. Id. at 1–2. 4 As requested in the April 2024 Decision, charts showing the intra-corporate relationships between and among the Grupo México companies before and after the proposed acquisition of CGR are attached to the petition as Exhibit A. See April 2024 Decision, FD 36701, slip op. at 2–3 (requiring information about corporate structure and holdings). 5 Grupo México also obtained after-the-fact authority to acquire Copper Basin in response to questions raised by the Board in the April 2024 Decision in Docket No. FD 36701. See Grupo México, S.A.B. de C.V.—Acquis. of Control E:\FR\FM\13AUN1.SGM Continued 13AUN1 65966 Federal Register / Vol. 89, No. 156 / Tuesday, August 13, 2024 / Notices As described in the petition, GMXT has reached agreements with Seacor and GWI under which GMXT would acquire an indirect 60% ownership interest in the JV, ‘‘which includes the railroad equipment and trackage rights over 0.583 miles of line of railroad in the Port of Mobile, Ala[.] known as tracks 14 and 15, and the rail ferry service between the docks and the U.S. maritime territorial border.’’ (Id. at 4.) 6 Specifically, GMXT (through GMXT Marine LLC, an indirect wholly owned subsidiary) will acquire all of Seacor’s 50% ownership interest in the JV, and 20% of GWI’s 50% ownership interest, resulting in GMXT having an indirect 60% ownership interest in the JV and control of the JV and CGR. (Pet. 4.) GMXT states that Seabulk Fleet Management LLC, an affiliate of Seacor, will remain as ferry operator on a contract basis with CGR. (Id.) In support of its petition, GMXT states that CGR will continue to operate in the same manner as it currently does. (Id. at 6.) GMXT notes that concentrating ownership of CGR in GMXT, a frequent user of the rail ferry service, will ensure that revenue from the service is used for railroad purposes and provide GMXT with both greater incentive and ability to invest in the rail ferry and improve operations. (Id.) GMXT asserts that granting the exemption will promote several goals of the rail transportation policy (RTP) of 49 U.S.C. 10101. (Id. at 6–7 (listing provisions).) GMXT further contends that the grant of an exemption will not adversely affect any of the remaining elements of the RTP. (Id. at 7.) Finally, GMXT asserts that the transaction is limited in scope and that application of the requirements of sections 11323–24 is not necessary to protect shippers from the abuse of market power, and it explains the reasons for this contention. (Id. at 7–11.) lotter on DSK11XQN23PROD with NOTICES1 Discussion and Conclusions The acquisition of control of a rail carrier by a person that is not a rail carrier but that controls any number of rail carriers requires prior approval from the Board under 49 U.S.C. 11323(a)(5). Under section 10502(a), however, the Board shall, to the maximum extent consistent with 49 U.S.C. subtitle IV, part A, exempt a transaction or service from regulation when it finds that: (1) Exemption—Copper Basin Ry., FD 36767 (STB served June 14, 2024). 6 Copies of the agreements are attached to the petition as Exhibit C. On July 3, 2024, GMXT filed an amendment to the agreement with Seacor modifying certain dates specified in the agreement. GMXT states that the amendment was filed for completeness and affects no substantive provision of the agreement. (GMXT Suppl. 3.) VerDate Sep<11>2014 17:55 Aug 12, 2024 Jkt 262001 regulation is not necessary to carry out the RTP of 49 U.S.C. 10101; and (2) either (a) the transaction or service is limited in scope, or (b) regulation is not needed to protect shippers from the abuse of market power. In this case, an exemption from the prior approval requirements of 49 U.S.C. 11323–24 is consistent with the standards of 49 U.S.C. 10502. Detailed scrutiny of the proposed transaction through an application for review and approval under sections 11323–24 is not necessary here to carry out the RTP. Under these circumstances, and given GMXT’s representations, approval of the transaction would result in a change in ownership and control of CGR with no lessening of competition. GMXT asserts that concentrating ownership of CGR in GMXT, a frequent user of the rail ferry service, will ensure that revenue from the service is used for railroad purposes and provide GMXT with greater incentive and ability to invest in the rail ferry and to improve operations. (Pet. 6.) Therefore, an exemption would further the RTP by promoting a safe and efficient rail transportation system, 49 U.S.C. 10101(3); ensuring the development and continuation of a sound rail transportation system to meet the needs of the public, 49 U.S.C. 10101(4); fostering sound economic conditions in transportation, 49 U.S.C. 10101(5); and encouraging efficient management of railroads, 49 U.S.C. 10101(9). An exemption would also promote the RTP by minimizing the need for federal regulatory control over the transaction, 49 U.S.C. 10101(2); reducing regulatory barriers to entry, 49 U.S.C. 10101(7); and providing for the expeditious resolution of this proceeding, 49 U.S.C. 10101(15). Other aspects of the RTP would not be adversely affected. Nor is detailed scrutiny of the proposed transaction necessary to protect shippers from an abuse of market power.7 As noted in the petition, the market for the transportation of goods between the U.S. and Mexico is robust; shippers have many transportation choices, and CGR’s rail ferry service is a small component of that dynamic market. (Pet. 8.) Moreover, the transaction does not prevent other rail carriers—or any entity except Seacor and its affiliates (for a period of five years) 8—from entering the market 7 Given this finding, the Board need not determine whether the transaction is limited in scope. See 49 U.S.C. 10502(a). 8 In response to questions raised in the April 2024 Decision in Docket No. FD 36701 regarding the competitive impact of a non-compete provision in the GMXT-Seacor agreement, the petition explains that the provision restricts Seacor and its affiliates PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 to compete with CGR by offering rail ferry service between Mobile and Coatzacoalcos or between other port locations on the Gulf of Mexico in either country. (Id. at 8–10.) GMXT states that no shippers would experience a reduction of competitive options. (Id. at 8.) 9 GMXT also explains that CGR must interchange traffic moving into and out of its two tracks at the Port of Mobile; that the transaction agreements do not limit its ability to interchange with any of several third-party connecting carriers; and that the proposed transaction involves the common control of carriers that have only one direct connection and do not compete with each other.10 GMXT further represents ‘‘that it will not use the connection between CGR and Ferrosur to foreclose vertical competition over efficient joint line routes with unaffiliated carriers,’’ (Pet. 9 n.9), and the Board will hold GMXT to that statement.11 See Genesee & Wyo.— from providing or supporting a competing rail ferry service for five years between U.S. and Mexican ports in the designated area in which CGR will provide service. (Pet. 10.) It emphasizes that other companies can provide rail ferry service in CGR’s territory, and that any company, including Seacor, can ship freight between the U.S. and Mexico by land. (Id.) The petition further contends that such a provision is necessary to protect GMXT’s investment in CGR, including acquisition of CGR’s goodwill and relationship with customers, which may be imperiled if Seacor commences new rail ferry operations that replicate CGR’s current service. (Id.) After a review of the contractual provision, and based on the information submitted in the petition, the Board finds that the clause will not have an anticompetitive effect, on balance, in the market in which CGR operates. 9 (See also id. at 8 (stating that ‘‘shippers will have the same service options available to them as they have now’’; that ‘‘[n]o shipper will lose an existing transportation option’’; and that ‘‘CGR will continue to provide common carrier rail service’’).) 10 GMXT’s assertion that the Board ‘‘has consistently rejected the notion that new single-line movements created through merger would lead the merged carrier to vertically foreclose competition over efficient routes by refusing to cooperate with unaffiliated carriers,’’ (Pet. 8–9 (quoting a 2007 decision in a control proceeding)), is mistaken. See Canadian Pac. Ry.—Control—Kan. City S., FD 36500, slip op. at 44–47 (STB served Mar. 15, 2023) (concluding that the one-lump theory does not justify a presumption that a vertical combination will not result in competitive harm). 11 GMXT states that it does not concede that competitive effects of interchange in Mexico fall within the Board’s jurisdiction but makes this representation in the event the Board concludes otherwise. (Pet. 9 n.9.) The Board has jurisdiction over transportation in the United States between a place in the United States and a place in a foreign country. See 49 U.S.C. 10501(a)(2)(F); see also, e.g., Can. Packers, Ltd. v. Atchison, Topeka & Santa Fe Ry., 385 U.S. 182 (1966) (upholding ICC’s determination that it had jurisdiction to determine the reasonableness of a joint through international freight rate from New Mexico to Canada and to order reparations, including for the overcharge on the Canadian portion of the trip); Canadian Pac. Ry.—Control, FD 36500, slip op. at 54 & n.77 (Board may consider U.S.-related impacts of potential rate manipulation or other post-transaction conduct that E:\FR\FM\13AUN1.SGM 13AUN1 Federal Register / Vol. 89, No. 156 / Tuesday, August 13, 2024 / Notices lotter on DSK11XQN23PROD with NOTICES1 Acquis. of Control Exemption—Atl. W. Transp. & Heart of Ga. R.R., FD 36105, slip op. at 3 (STB served Apr. 18, 2017) (holding carrier to similar representation in exemption proceeding). Moreover, no shipper (or any other entity) has objected to this control transaction. Based on the record, the Board finds that the transaction does not shift or consolidate market power and that regulation is not needed to protect shippers from an abuse of market power. Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a carrier of its statutory obligation to protect the interests of employees. Accordingly, as a condition to granting this exemption, the Board will impose the standard employee protective conditions in New York Dock Railway—Control—Brooklyn Eastern District Terminal, 360 I.C.C 60, aff’d New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 1979). The control transaction is exempt from environmental reporting requirements under 49 CFR 1105.6(c)(1)(i) because it will not result in any significant change in carrier operations. Similarly, the transaction is exempt from the historic reporting requirements under 49 CFR 1105.8(b)(1) because GMXT states that it has no plans to dispose of or alter properties subject to the Board’s jurisdiction that are 50 years old or older. In its July 3, 2024 filing, GMXT asks that the exemption be made effective no later than August 27, 2024. (GMXT Suppl. 4.) GMXT’s rationale is not persuasive, particularly given the questions raised in the April 2024 Decision in Docket No. FD 36701 and the complexities of this proceeding, which counsel in favor of giving interested parties time to review this decision prior to the exemption’s effective date.12 The Board will retain the 30-day period prescribed by 49 CFR 1121.4(e). The exemption will be effective September 12, 2024. Petitions to stay must be filed by August 23, 2024. adversely affects interline optionality at international gateway and, if warranted, remedy the situation). 12 GMXT requests expedited consideration ‘‘to allow the parties to complete all necessary actions required to accomplish the postponed closing [of the agreement with Seacor] without any further delay.’’ (GMXT Suppl. 4; see id. at 3 (stating that closing was postponed ‘‘to align with [the agreement between GMXT and GWI], which includes a similar date’’).) Petitioners’ desire to meet their chosen closing date(s) is not, by itself, a sufficient basis for shortening the 30-day period (and, potentially, the related interim deadlines for stay, reconsideration, and reopening requests) identified in 49 CFR 1121.4(e) before an exemption may take effect, particularly given the circumstances of this proceeding. VerDate Sep<11>2014 17:55 Aug 12, 2024 Jkt 262001 Petitions for reconsideration or petitions to reopen must be filed by September 3, 2024. It is ordered: 1. Under 49 U.S.C. 10502, the Board exempts from the prior approval requirements of 49 U.S.C. 11323–25 the control transaction described above, subject to the employee protective conditions in New York Dock Railway— Control—Brooklyn Eastern District Terminal, 360 I.C.C 60, aff’d New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 1979). 2. Petitioners must adhere to GMXT’s statement that it will not use the connection between CGR and Ferrosur to foreclose vertical competition over efficient joint line routes with unaffiliated carriers. 3. Notice of the exemption will be published in the Federal Register. 4. The exemption will become effective on September 12, 2024. Petitions for stay must be filed by August 23, 2024. Petitions for reconsideration or petitions to reopen must be filed by September 3, 2024. Decided: August 8, 2024. By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz. Kenyatta Clay, Clearance Clerk. [FR Doc. 2024–18030 Filed 8–12–24; 8:45 am] BILLING CODE 4915–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Docket No.: FAA–2024–0357; Summary Notice No. 2024–34] Petition for Exemption; Summary of Petition Received; Department of the Army—Joint Task Force North Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice. AGENCY: This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public’s awareness of, and participation in, the FAA’s exemption process. Neither publication of this notice nor the inclusion nor omission of information in the summary is intended to affect the legal status of the petition or its final disposition. SUMMARY: Comments on this petition must identify the petition docket number and must be received on or before September 3, 2024. DATES: PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 65967 Send comments identified by docket number [FAA–2024–0357] using any of the following methods: • Federal eRulemaking Portal: Go to https://www.regulations.gov and follow the online instructions for sending your comments electronically. • Mail: Send comments to Docket Operations, M–30; U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W12–140, West Building Ground Floor, Washington, DC 20590–0001. • Hand Delivery or Courier: Take comments to Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC 20590– 0001, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • Fax: Fax comments to Docket Operations at (202) 493–2251. Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to https://www.regulations.gov, as described in the system of records notice (DOT/ALL–14 FDMS), which can be reviewed at https://www.dot.gov/ privacy. Docket: Background documents or comments received may be read at https://www.regulations.gov at any time. Follow the online instructions for accessing the docket or go to the Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC 20590–0001, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Alexander Kem, alexander.s.kem@ faa.gov Phone: 202–267–7571, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591. This notice is published pursuant to 14 CFR 11.85. ADDRESSES: Issued in Washington, DC. Dan Ngo, Manager, Part 11 Petitions Branch, Office of Rulemaking. Petition for Exemption Docket No.: FAA–2024–0357. Petitioner: Department of the Army— Joint Task Force North. Section(s) of 14 CFR Affected: §§ 91.209(a)(1) and 91.209(b). Description of Relief Sought: Department of the Army—Joint Task Force North has requested relief from 14 CFR 91.209(a)(1) and 91.209(b) to E:\FR\FM\13AUN1.SGM 13AUN1

Agencies

[Federal Register Volume 89, Number 156 (Tuesday, August 13, 2024)]
[Notices]
[Pages 65965-65967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-18030]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36780]


Grupo M[eacute]xico, S.A.B. de C.V. and GM[eacute]xico 
Transportes, S.A.B. de C.V.--Acquisition of Control Exemption--CG 
Railway, LLC

    On May 15, 2024, GM[eacute]xico Transportes, S.A.B. de C.V. (GMXT), 
a noncarrier railroad holding company, filed a petition under 49 U.S.C. 
10502 for exemption from the prior approval requirements of 49 U.S.C. 
11323-24 to allow GMXT to acquire an indirect controlling ownership 
interest in CG Railway, LLC (CGR), a Class III carrier.\1\ The Board 
will grant the petition for exemption, subject to standard employee 
protective conditions.
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    \1\ The petition identifies GMXT as the entity seeking Board 
authority to acquire a controlling ownership interest in CGR. 
However, because Grupo M[eacute]xico, S.A.B. de C.V. (Grupo 
M[eacute]xico) is the ultimate parent company of GMXT, this 
proceeding has been recaptioned to include Grupo M[eacute]xico. GMXT 
and Grupo M[eacute]xico are collectively referred to as Petitioners.
    GMXT's initial petition, filed in Docket No. FD 36701, was 
rejected as incomplete and for failing to provide adequate 
supporting information. See GM[eacute]xico Transportes, S.A.B. de 
C.V.--Acquis. of Control Exemption--CG Ry. (April 2024 Decision), FD 
36701, slip op. at 2-4 (STB served Apr. 4, 2024). The Board also 
required CGR and its owners to respond to questions concerning, 
respectively, authorization for CGR's current operations and for the 
transaction in which they acquired CGR. Id. at 4-5; see also infra 
notes 3 & 4.
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Background

    CGR is wholly owned by Golfo de M[eacute]xico Rail Ferry Holdings 
LLC, a 50/50 joint venture (JV) between Seacor Holdings, Inc. (through 
its wholly owned subsidiary, Rail Ferry Investment Holdings Inc.) 
(Seacor) and Genesee & Wyoming, Inc. (through its wholly owned 
subsidiary, G&W Agave Holdings Inc.) (GWI).\2\ (Pet. 2-3.) CGR provides 
rail carrier service in the Port of Mobile, Ala., and rail ferry 
service between the Port of Mobile and the Port of Coatzacoalcos, 
Mexico, where the rail ferry operation connects to the Ferrosur 
Railway, a rail carrier subsidiary of GMXT located in Mexico.\3\ (Pet. 
3.)
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    \2\ In response to questions raised in the April 2024 Decision 
in Docket No. FD 36701, GWI and Seacor jointly submitted a letter 
explaining that neither GWI nor Seacor ``controlled'' CGR within the 
meaning of 49 U.S.C. 10102(7) and 11323(a) due to their 50/50 
ownership split and provisions in the agreement governing the JV 
requiring that decision-making authority is shared equally between 
the parties. See Letter, May 7, 2024, GM[eacute]xico Transportes, FD 
36701. In the absence of any countervailing evidence, the Board 
finds this explanation satisfactory and supported by the agreement 
governing the JV.
    \3\ Following the April 2024 Decision in Docket No. FD 36701, 
CGR obtained after-the-fact authority to operate the rail ferry 
service between the Port of Mobile and the U.S. maritime boundary 
line in the Gulf of Mexico. See CG Ry.--Operation Exemption--Rail 
Ferry Serv., FD 36775 (STB served May 23, 2024). It had previously 
sought and received authority to operate certain tracks within the 
Port of Mobile, but not to operate the broader ferry service. Id. at 
1-2.
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    GMXT, a subsidiary of Grupo M[eacute]xico (a noncarrier holding 
company), controls, through indirect ownership, Florida East Coast 
Railway, L.L.C. (FECR), a Class II carrier in Florida, and Texas 
Pacifico Transportation, Ltd. (Texas Pacifico), a Class III carrier in 
Texas.\4\ (Pet. 3); see Grupo M[eacute]xico, S.A.B. de C.V.--Control 
Exemption--Fla. E. Coast Holdings Corp., FD 36109, slip op. at 1 (STB 
served May 9, 2017). As explained in the petition, FECR and Texas 
Pacifico are in the same corporate family as the Copper Basin Railway, 
Inc., a Class III carrier in Arizona that Grupo M[eacute]xico controls 
through a different indirect subsidiary, ASARCO LLC. (Pet. 3-4).\5\
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    \4\ As requested in the April 2024 Decision, charts showing the 
intra-corporate relationships between and among the Grupo 
M[eacute]xico companies before and after the proposed acquisition of 
CGR are attached to the petition as Exhibit A. See April 2024 
Decision, FD 36701, slip op. at 2-3 (requiring information about 
corporate structure and holdings).
    \5\ Grupo M[eacute]xico also obtained after-the-fact authority 
to acquire Copper Basin in response to questions raised by the Board 
in the April 2024 Decision in Docket No. FD 36701. See Grupo 
M[eacute]xico, S.A.B. de C.V.--Acquis. of Control Exemption--Copper 
Basin Ry., FD 36767 (STB served June 14, 2024).

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[[Page 65966]]

    As described in the petition, GMXT has reached agreements with 
Seacor and GWI under which GMXT would acquire an indirect 60% ownership 
interest in the JV, ``which includes the railroad equipment and 
trackage rights over 0.583 miles of line of railroad in the Port of 
Mobile, Ala[.] known as tracks 14 and 15, and the rail ferry service 
between the docks and the U.S. maritime territorial border.'' (Id. at 
4.) \6\ Specifically, GMXT (through GMXT Marine LLC, an indirect wholly 
owned subsidiary) will acquire all of Seacor's 50% ownership interest 
in the JV, and 20% of GWI's 50% ownership interest, resulting in GMXT 
having an indirect 60% ownership interest in the JV and control of the 
JV and CGR. (Pet. 4.) GMXT states that Seabulk Fleet Management LLC, an 
affiliate of Seacor, will remain as ferry operator on a contract basis 
with CGR. (Id.)
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    \6\ Copies of the agreements are attached to the petition as 
Exhibit C. On July 3, 2024, GMXT filed an amendment to the agreement 
with Seacor modifying certain dates specified in the agreement. GMXT 
states that the amendment was filed for completeness and affects no 
substantive provision of the agreement. (GMXT Suppl. 3.)
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    In support of its petition, GMXT states that CGR will continue to 
operate in the same manner as it currently does. (Id. at 6.) GMXT notes 
that concentrating ownership of CGR in GMXT, a frequent user of the 
rail ferry service, will ensure that revenue from the service is used 
for railroad purposes and provide GMXT with both greater incentive and 
ability to invest in the rail ferry and improve operations. (Id.) GMXT 
asserts that granting the exemption will promote several goals of the 
rail transportation policy (RTP) of 49 U.S.C. 10101. (Id. at 6-7 
(listing provisions).) GMXT further contends that the grant of an 
exemption will not adversely affect any of the remaining elements of 
the RTP. (Id. at 7.) Finally, GMXT asserts that the transaction is 
limited in scope and that application of the requirements of sections 
11323-24 is not necessary to protect shippers from the abuse of market 
power, and it explains the reasons for this contention. (Id. at 7-11.)

Discussion and Conclusions

    The acquisition of control of a rail carrier by a person that is 
not a rail carrier but that controls any number of rail carriers 
requires prior approval from the Board under 49 U.S.C. 11323(a)(5). 
Under section 10502(a), however, the Board shall, to the maximum extent 
consistent with 49 U.S.C. subtitle IV, part A, exempt a transaction or 
service from regulation when it finds that: (1) regulation is not 
necessary to carry out the RTP of 49 U.S.C. 10101; and (2) either (a) 
the transaction or service is limited in scope, or (b) regulation is 
not needed to protect shippers from the abuse of market power.
    In this case, an exemption from the prior approval requirements of 
49 U.S.C. 11323-24 is consistent with the standards of 49 U.S.C. 10502. 
Detailed scrutiny of the proposed transaction through an application 
for review and approval under sections 11323-24 is not necessary here 
to carry out the RTP. Under these circumstances, and given GMXT's 
representations, approval of the transaction would result in a change 
in ownership and control of CGR with no lessening of competition. GMXT 
asserts that concentrating ownership of CGR in GMXT, a frequent user of 
the rail ferry service, will ensure that revenue from the service is 
used for railroad purposes and provide GMXT with greater incentive and 
ability to invest in the rail ferry and to improve operations. (Pet. 
6.) Therefore, an exemption would further the RTP by promoting a safe 
and efficient rail transportation system, 49 U.S.C. 10101(3); ensuring 
the development and continuation of a sound rail transportation system 
to meet the needs of the public, 49 U.S.C. 10101(4); fostering sound 
economic conditions in transportation, 49 U.S.C. 10101(5); and 
encouraging efficient management of railroads, 49 U.S.C. 10101(9). An 
exemption would also promote the RTP by minimizing the need for federal 
regulatory control over the transaction, 49 U.S.C. 10101(2); reducing 
regulatory barriers to entry, 49 U.S.C. 10101(7); and providing for the 
expeditious resolution of this proceeding, 49 U.S.C. 10101(15). Other 
aspects of the RTP would not be adversely affected.
    Nor is detailed scrutiny of the proposed transaction necessary to 
protect shippers from an abuse of market power.\7\ As noted in the 
petition, the market for the transportation of goods between the U.S. 
and Mexico is robust; shippers have many transportation choices, and 
CGR's rail ferry service is a small component of that dynamic market. 
(Pet. 8.) Moreover, the transaction does not prevent other rail 
carriers--or any entity except Seacor and its affiliates (for a period 
of five years) \8\--from entering the market to compete with CGR by 
offering rail ferry service between Mobile and Coatzacoalcos or between 
other port locations on the Gulf of Mexico in either country. (Id. at 
8-10.) GMXT states that no shippers would experience a reduction of 
competitive options. (Id. at 8.) \9\ GMXT also explains that CGR must 
interchange traffic moving into and out of its two tracks at the Port 
of Mobile; that the transaction agreements do not limit its ability to 
interchange with any of several third-party connecting carriers; and 
that the proposed transaction involves the common control of carriers 
that have only one direct connection and do not compete with each 
other.\10\ GMXT further represents ``that it will not use the 
connection between CGR and Ferrosur to foreclose vertical competition 
over efficient joint line routes with unaffiliated carriers,'' (Pet. 9 
n.9), and the Board will hold GMXT to that statement.\11\ See Genesee & 
Wyo.--

[[Page 65967]]

Acquis. of Control Exemption--Atl. W. Transp. & Heart of Ga. R.R., FD 
36105, slip op. at 3 (STB served Apr. 18, 2017) (holding carrier to 
similar representation in exemption proceeding). Moreover, no shipper 
(or any other entity) has objected to this control transaction. Based 
on the record, the Board finds that the transaction does not shift or 
consolidate market power and that regulation is not needed to protect 
shippers from an abuse of market power.
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    \7\ Given this finding, the Board need not determine whether the 
transaction is limited in scope. See 49 U.S.C. 10502(a).
    \8\ In response to questions raised in the April 2024 Decision 
in Docket No. FD 36701 regarding the competitive impact of a non-
compete provision in the GMXT-Seacor agreement, the petition 
explains that the provision restricts Seacor and its affiliates from 
providing or supporting a competing rail ferry service for five 
years between U.S. and Mexican ports in the designated area in which 
CGR will provide service. (Pet. 10.) It emphasizes that other 
companies can provide rail ferry service in CGR's territory, and 
that any company, including Seacor, can ship freight between the 
U.S. and Mexico by land. (Id.) The petition further contends that 
such a provision is necessary to protect GMXT's investment in CGR, 
including acquisition of CGR's goodwill and relationship with 
customers, which may be imperiled if Seacor commences new rail ferry 
operations that replicate CGR's current service. (Id.) After a 
review of the contractual provision, and based on the information 
submitted in the petition, the Board finds that the clause will not 
have an anticompetitive effect, on balance, in the market in which 
CGR operates.
    \9\ (See also id. at 8 (stating that ``shippers will have the 
same service options available to them as they have now''; that 
``[n]o shipper will lose an existing transportation option''; and 
that ``CGR will continue to provide common carrier rail service'').)
    \10\ GMXT's assertion that the Board ``has consistently rejected 
the notion that new single-line movements created through merger 
would lead the merged carrier to vertically foreclose competition 
over efficient routes by refusing to cooperate with unaffiliated 
carriers,'' (Pet. 8-9 (quoting a 2007 decision in a control 
proceeding)), is mistaken. See Canadian Pac. Ry.--Control--Kan. City 
S., FD 36500, slip op. at 44-47 (STB served Mar. 15, 2023) 
(concluding that the one-lump theory does not justify a presumption 
that a vertical combination will not result in competitive harm).
    \11\ GMXT states that it does not concede that competitive 
effects of interchange in Mexico fall within the Board's 
jurisdiction but makes this representation in the event the Board 
concludes otherwise. (Pet. 9 n.9.) The Board has jurisdiction over 
transportation in the United States between a place in the United 
States and a place in a foreign country. See 49 U.S.C. 
10501(a)(2)(F); see also, e.g., Can. Packers, Ltd. v. Atchison, 
Topeka & Santa Fe Ry., 385 U.S. 182 (1966) (upholding ICC's 
determination that it had jurisdiction to determine the 
reasonableness of a joint through international freight rate from 
New Mexico to Canada and to order reparations, including for the 
overcharge on the Canadian portion of the trip); Canadian Pac. Ry.--
Control, FD 36500, slip op. at 54 & n.77 (Board may consider U.S.-
related impacts of potential rate manipulation or other post-
transaction conduct that adversely affects interline optionality at 
international gateway and, if warranted, remedy the situation).
---------------------------------------------------------------------------

    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a carrier of its statutory obligation to protect 
the interests of employees. Accordingly, as a condition to granting 
this exemption, the Board will impose the standard employee protective 
conditions in New York Dock Railway--Control--Brooklyn Eastern District 
Terminal, 360 I.C.C 60, aff'd New York Dock Railway v. United States, 
609 F.2d 83 (2d Cir. 1979).
    The control transaction is exempt from environmental reporting 
requirements under 49 CFR 1105.6(c)(1)(i) because it will not result in 
any significant change in carrier operations. Similarly, the 
transaction is exempt from the historic reporting requirements under 49 
CFR 1105.8(b)(1) because GMXT states that it has no plans to dispose of 
or alter properties subject to the Board's jurisdiction that are 50 
years old or older.
    In its July 3, 2024 filing, GMXT asks that the exemption be made 
effective no later than August 27, 2024. (GMXT Suppl. 4.) GMXT's 
rationale is not persuasive, particularly given the questions raised in 
the April 2024 Decision in Docket No. FD 36701 and the complexities of 
this proceeding, which counsel in favor of giving interested parties 
time to review this decision prior to the exemption's effective 
date.\12\ The Board will retain the 30-day period prescribed by 49 CFR 
1121.4(e). The exemption will be effective September 12, 2024. 
Petitions to stay must be filed by August 23, 2024. Petitions for 
reconsideration or petitions to reopen must be filed by September 3, 
2024.
---------------------------------------------------------------------------

    \12\ GMXT requests expedited consideration ``to allow the 
parties to complete all necessary actions required to accomplish the 
postponed closing [of the agreement with Seacor] without any further 
delay.'' (GMXT Suppl. 4; see id. at 3 (stating that closing was 
postponed ``to align with [the agreement between GMXT and GWI], 
which includes a similar date'').) Petitioners' desire to meet their 
chosen closing date(s) is not, by itself, a sufficient basis for 
shortening the 30-day period (and, potentially, the related interim 
deadlines for stay, reconsideration, and reopening requests) 
identified in 49 CFR 1121.4(e) before an exemption may take effect, 
particularly given the circumstances of this proceeding.
---------------------------------------------------------------------------

    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts from the prior approval 
requirements of 49 U.S.C. 11323-25 the control transaction described 
above, subject to the employee protective conditions in New York Dock 
Railway--Control--Brooklyn Eastern District Terminal, 360 I.C.C 60, 
aff'd New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 
1979).
    2. Petitioners must adhere to GMXT's statement that it will not use 
the connection between CGR and Ferrosur to foreclose vertical 
competition over efficient joint line routes with unaffiliated 
carriers.
    3. Notice of the exemption will be published in the Federal 
Register.
    4. The exemption will become effective on September 12, 2024. 
Petitions for stay must be filed by August 23, 2024. Petitions for 
reconsideration or petitions to reopen must be filed by September 3, 
2024.

    Decided: August 8, 2024.

    By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Kenyatta Clay,
Clearance Clerk.
[FR Doc. 2024-18030 Filed 8-12-24; 8:45 am]
BILLING CODE 4915-01-P
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