81 FR 76994 - National Express LLC-Acquisition of Control-Trinity, Inc., Trinity Cars, Inc., and Trinity Student Delivery, LLC

SURFACE TRANSPORTATION BOARD

Federal Register Volume 81, Issue 214 (November 4, 2016)

On October 7, 2016, National Express LLC (National Express or Applicant), a noncarrier, filed an application under 49 U.S.C. 14303 to acquire control of Trinity, Inc. (Trinity), Trinity Cars, Inc. (Trinity Cars), and Trinity Student Delivery, LLC (Trinity Student) (collectively, Acquisition Carriers). The Board is tentatively approving and authorizing the transaction, and, if no opposing comments are timely filed, this notice will be the final Board action. Persons wishing to oppose the application must follow the rules at 49 CFR 1182.5 & 1182.8.

[Federal Register Volume 81, Number 214 (Friday, November 4, 2016)]
[Notices]
[Pages 76994-76997]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-26724]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21073]


National Express LLC--Acquisition of Control--Trinity, Inc., 
Trinity Cars, Inc., and Trinity Student Delivery, LLC

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: On October 7, 2016, National Express LLC (National Express or 
Applicant), a noncarrier, filed an application under 49 U.S.C. 14303 to 
acquire control of Trinity, Inc. (Trinity), Trinity Cars, Inc. (Trinity 
Cars), and Trinity Student Delivery, LLC (Trinity Student) 
(collectively, Acquisition Carriers). The Board is tentatively 
approving and authorizing the transaction, and, if no opposing comments 
are timely filed, this notice will be the final Board action. Persons 
wishing to oppose the application must follow the rules at 49 CFR 
1182.5 & 1182.8.

DATES: Comments must be filed by December 19, 2016. Applicant may file 
a reply by January 3, 2017. If no opposing comments are filed by 
December 19, 2016, this notice shall be effective on December 20, 2016.

ADDRESSES: Send an original and 10 copies of any comments referring to 
Docket No. MCF 21073 to: Surface Transportation Board, 395 E Street 
SW., Washington, DC 20423-0001. In addition, send one copy of comments 
to Applicant's representative: Andrew K. Light, Scopelitis, Garvin, 
Light, Hanson & Feary, P.C., 10 W. Market Street, Suite 1500, 
Indianapolis, IN 46204.

FOR FURTHER INFORMATION CONTACT: Jonathon Binet (202) 245-0368. Federal 
Information Relay Service (FIRS) for the hearing impaired: 1-800-877-
8339.

SUPPLEMENTARY INFORMATION: Applicant, a noncarrier, states that it is a 
holding company organized under the laws of the state of Delaware that 
is indirectly controlled by a British corporation, National Express 
Group, PLC (Express Group). Applicant states that Express Group 
indirectly controls the following passenger motor carriers 
(collectively, National Express Affiliated Carriers): Beck Bus 
Transportation Corp. (Beck); Carrier Management Corporation (CMI); 
Diamond Transportation Services, Inc. (Diamond); Durham School 
Services, L.P. (Durham); MV Student Transportation, Inc. (MV); National 
Express Transit Corporation (NETC); National Express Transit Services 
Corporation (NETSC); Petermann Ltd. (LTD); Petermann Northeast LLC 
(Northeast); Petermann Northwest LLC (Northwest); Petermann Southwest 
LLC (Southwest); Petermann STSA, LLC (STSA); The Provider Enterprises, 
Inc. (Provider); Rainbow Management Service Inc. (Rainbow); Robertson 
Transit, Inc. (Robertson); Safeway Training and Transportation Services 
Inc. (Safeway); Septran, Inc. (Septran); Smith Bus Service, Inc. 
(Smith); Suburban Paratransit Service, Inc. (Suburban Paratransit); 
Trans Express,

[[Page 76995]]

Inc. (Trans Express); and White Plains Bus Company, Inc. (White 
Plains).
    Applicant asserts the following facts regarding the National 
Express Affiliated Carriers held by Express Group:
     Beck is a passenger motor carrier primarily engaged in 
providing student school bus transportation services in the states of 
Illinois and Indiana under contracts with regional and local school 
jurisdictions. Beck also provides charter passenger services to the 
public. It holds interstate common carrier authority from Federal Motor 
Carrier Safety Administration under MC-143528.
     CMI is a passenger motor carrier doing business as 
Matthews Bus Company and is primarily engaged in providing student 
school bus transportation services in the state of Pennsylvania under 
contracts with regional and local school jurisdictions. CMI also 
provides intrastate charter passenger services to the public. CMI does 
not have interstate carrier authority as it is not required for the 
operations conducted by CMI.
     Diamond is a passenger motor carrier providing exempt 
interstate and regulated intrastate paratransit and shuttle services in 
the District of Columbia metropolitan area. It does not have interstate 
carrier authority.
     Durham is a passenger motor carrier primarily engaged in 
providing student school bus transportation services in approximately 
32 states under contracts with regional and local school jurisdictions. 
Durham also provides charter passenger services to the public. It holds 
interstate common carrier authority under MC-163066.
     MV is a passenger motor carrier primarily engaged in 
providing student school bus transportation services in the state of 
Missouri under contracts with regional and local school jurisdictions. 
MV also provides charter passenger services to the public. It holds 
interstate common carrier authority under MC-148934.
     NETC is an intrastate passenger motor carrier with its 
principal place of business in Cincinnati, Ohio. NETC does not have 
interstate carrier authority.
     NETSC is a passenger motor carrier engaged primarily in 
providing intrastate transit services in the areas of Westmoreland, PA; 
Arlington, VA; Greensboro, NC; Vallejo, CA; and Yuma, AZ. NETSC does 
not have interstate carrier authority as it is not required for the 
operations conducted by NETSC.
     LTD is a passenger motor carrier primarily engaged in 
providing non-regulated school bus transportation services in the state 
of Ohio under contracts with regional and local school jurisdictions. 
LTD also provides charter passenger services to the public. It holds 
interstate common carrier authority under MC-364668.
     Northeast is a passenger motor carrier primarily engaged 
in providing student school bus transportation services, primarily in 
the states of Ohio and Pennsylvania under contracts with regional and 
local school jurisdictions. Northeast also provides charter passenger 
services to the public. It holds interstate contract carrier authority 
under MC-723926.
     Northwest is a passenger motor carrier primarily engaged 
in providing non-regulated school bus transportation services under 
contracts with regional and local school jurisdictions. Northwest does 
not have interstate carrier authority as it is not required for the 
operations conducted by Northwest.
     Southwest is a passenger motor carrier primarily engaged 
in providing student school bus transportation services in the state of 
Texas under contracts with regional and local school jurisdictions. 
Southwest also provides charter passenger services to the public. It 
holds interstate contract carrier authority under MC-644996.
     STSA is a passenger motor carrier primarily engaged in 
providing student school bus transportation services, primarily in the 
state of Kansas under contracts with regional and local school 
jurisdictions. STSA also provides charter passenger services to the 
public. It holds interstate contract carrier authority under MC-749360.
     Provider is a passenger motor carrier doing business as 
Provider Bus, and is primarily engaged in providing non-regulated 
school bus transportation services in the state of New Hampshire under 
contracts with regional and local school jurisdictions. Provider does 
not have interstate carrier authority as it is not required for the 
operations conducted by Provider.
     Rainbow provides interstate and intrastate charter and 
special party passenger transportation services in the state of New 
York. It holds interstate passenger common carrier authority under MC-
490015.
     Robertson is a passenger motor carrier primarily engaged 
in providing non-regulated school bus transportation services in the 
state of New Hampshire under contracts with regional and local school 
jurisdictions. Robertson also provides charter passenger service to the 
public. It does not have active interstate carrier authority, though 
MC-176053 is assigned to it.
     Safeway is a passenger motor carrier primarily engaged in 
providing non-regulated school bus transportation services in the state 
of New Hampshire under contracts with regional and local school 
jurisdictions. It does not have active interstate carrier authority, 
though MC-522039 is assigned to it.
     Septran is a passenger motor carrier primarily engaged in 
providing non-regulated school bus transportation services in the state 
of Illinois under contracts with regional and local school 
jurisdictions. It does not have active interstate carrier authority, 
though MC-795208 is assigned to it.
     Smith is a passenger motor carrier primarily engaged in 
providing non-regulated school bus transportation services in the state 
of Maryland and surrounding areas under contracts with regional and 
local school jurisdictions. Smith does not have interstate carrier 
authority as it is not required for the operations conducted by Smith.
     Suburban Paratransit is a motor carrier providing 
paratransit services primarily in Westchester County and Bronx, N.Y. 
Suburban Paratransit does not have interstate carrier authority as it 
is not required for the operations conducted by Suburban Paratransit.
     Trans Express provides interstate and intrastate passenger 
transportation services in the state of New York. It holds interstate 
passenger common carrier authority under MC-187819.
     White Plains is a passenger motor carrier doing business 
as Suburban Charters, and it operates primarily as a provider of non-
regulated school bus transportation services in the state of New York. 
White Plains also operates as a motor passenger carrier providing 
charter service to the public. It holds interstate passenger common 
carrier authority under MC-160624.
    Applicant asserts the following facts with regard to the 
Acquisition Carriers:
     Trinity is a Michigan corporation operating primarily as a 
provider of non-regulated school bus transportation services in 
southeastern Michigan, and also operates as a passenger motor carrier 
providing charter service to the public. Trinity holds common carrier 
operating authority under MC-364003.
     Trinity Cars is also a Michigan corporation, operating as 
an intrastate passenger motor carrier as a provider of for-hire sedan 
and van service in southeastern Michigan. Trinity Cars holds interstate 
operating authority under MC-632139.
     Trinity Student is a Michigan limited liability company 
and a wholly-owned subsidiary of Trinity. Trinity Student operates 
primarily as a provider of non-regulated school bus transportation 
services in the areas of Toledo and Cleveland, Ohio. Trinity

[[Page 76996]]

Student also provides interstate charter passenger services. For 
purposes of its interstate passenger operations, Trinity Student holds 
common and contract carrier operating authority under MC-836335.
    Applicant states that all of the issued and outstanding stock of 
Trinity and Trinity Cars is owned and held by Jerry Sheppard, Jr., 
Trustee of the Jerry Sheppard, Jr. Revocable Inter-Vivos Trust U/A/D 
Sept. 24, 2003, as amended (Jerry Sheppard Trust), and Rebetha J. 
Sheppard, Trustee of the Rebetha J. Sheppard Revocable Inter-Vivos 
Trust U/A/D Sept. 24, 2003, as amended (Rebetha Sheppard Trust) 
(collectively, Sellers).
    Applicant asserts that there is one affiliate of the Acquisition 
Carriers, Trinity Coach, LLC, though it is not a part of the 
contemplated transaction. Applicant states that Trinity Coach, LLC, is 
a Michigan limited liability company that is a passenger motor carrier 
providing interstate services under common carrier authority under MC-
537169. Jerry Sheppard, Jr., individually, holds a 100% membership 
interest in Trinity Coach, LLC.
    Applicant further states that, other than the National Express 
Affiliated Carriers, the Acquisition Carriers, and Trinity Coach, there 
are no other affiliated carriers with regulated interstate operations, 
and the Sellers have no other direct or indirect ownership interest in 
any other interstate passenger motor carrier.
    Applicant also asserts that it would acquire direct 100% control of 
Trinity and Trinity Cars through stock ownership, and indirect control 
of Trinity Student as a wholly-owned subsidiary of Trinity.
    Under 49 U.S.C. 14303(b), the Board must approve and authorize a 
transaction that it finds consistent with the public interest, taking 
into consideration at least: (1) The effect of the proposed transaction 
on the adequacy of transportation to the public; (2) the total fixed 
charges that result; and (3) the interest of affected carrier 
employees. Applicant submitted information, as required by 49 CFR 
1182.2, including information to demonstrate that the proposed 
transaction is consistent with the public interest under 49 U.S.C. 
14303(b), and a statement that the aggregate gross operating revenues 
of the National Express Affiliated Carriers and the Acquisition 
Carriers exceeded $2 million for the preceding 12-month period. See 49 
U.S.C. 14303(g).\1\
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    \1\ Applicants with gross operating revenues exceeding $2 
million are required to meet the requirements of 49 CFR 1182.
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    Applicant submits that the proposed transaction would have no 
significant impact on the adequacy of transportation services to the 
public, as the Acquisition Carriers would continue to provide the 
services they currently provide using the same names for the 
foreseeable future. Applicant states that the Acquisition Carriers 
``will continue to operate, but going forward, will be operating within 
the National Express corporate family.'' (Appl. 14.)
    According to Applicant, ``[t]he addition of the Acquisition 
Carriers to the carriers held by National Express is consistent with 
the practices within the passenger motor carrier industry of strong, 
well-managed transportation organizations adapting their corporate 
structure to operate several different passenger carriers within the 
same market, but in different geographic areas.'' (Id.) Applicant 
asserts that the Acquisition Carriers are experienced in some of the 
same market segments already served by some of the National Express 
Affiliated Carriers. Applicant expects the transaction to result in 
operating efficiencies and cost savings derived from economies of 
scale, all of which, Applicant states, would help to ensure the 
provision of adequate service to the public. Applicant further asserts 
that bringing the Acquisition Carriers within the National Express 
corporate family would serve to enhance the viability of the overall 
organization and the operations of the National Express Affiliated 
Carriers, which would ensure the continued availability of adequate 
passenger transportation service for the public. (Id.)
    Applicant also claims that neither competition nor the public 
interest would be adversely affected by the contemplated transaction. 
Applicant states that the Acquisition Carriers are ``relatively small 
carriers in the overall markets in which they compete: Unregulated 
metropolitan school bus operations, providers of charter services, and 
providers of sedan and van services.'' (Id.) Applicant states that 
school bus operators typically occupy a limited portion of the charter 
business because (i) the equipment offered is not as comfortable as 
that offered by motor coach operators; and (ii) scheduling demands 
imposed by the primary school bus operation impose major constraints on 
charter services that can be offered. It further explains that the 
sedan and van services business sector is comprised of a number of 
providers, with no provider having a dominant market share in the 
sector. Applicant also explains that the charter and sedan and van 
services offered by the Acquisition Carriers are geographically 
dispersed from those of the National Express Affiliated Carriers, and 
that there is limited overlap in service areas and/or in customer bases 
among the National Express Affiliated Carriers and the Acquisition 
Carriers. Thus, Applicant states that the impact of the contemplated 
transaction on the regulated motor carrier industry would be minimal at 
most and that neither competition nor the public interest would be 
adversely affected.
    Applicant asserts that there are no fixed charges associated with 
the contemplated transaction. Applicant also states that it does not 
anticipate a measurable reduction in force or changes in compensation 
levels and/or benefits to employees. Applicant submits, however, that 
staffing redundancies could potentially result in limited downsizing of 
back-office or managerial level personnel.
    The Board finds that the acquisition proposed in the application is 
consistent with the public interest and should be tentatively approved 
and authorized. If any opposing comments are timely filed, these 
findings will be deemed vacated, and, unless a final decision can be 
made on the record as developed, a procedural schedule will be adopted 
to reconsider the application. See 49 CFR 1182.6(c). If no opposing 
comments are filed by the expiration of the comment period, this notice 
will take effect automatically and will be the final Board action.
    This action is categorically excluded from environmental review 
under 49 CFR 1105.6(c).
    Board decisions and notices are available on our Web site at 
``WWW.STB.GOV''.
    It is ordered:
    1. The proposed transaction is approved and authorized, subject to 
the filing of opposing comments.
    2. If opposing comments are timely filed, the findings made in this 
notice will be deemed vacated.
    3. This notice will be effective December 20, 2016, unless opposing 
comments are filed by December 19, 2016.
    4. A copy of this notice will be served on: (1) The U.S. Department 
of Transportation, Federal Motor Carrier Safety Administration, 1200 
New Jersey Avenue SE., Washington, DC 20590; (2) the U.S. Department of 
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW., 
Washington, DC 20530;

[[Page 76997]]

and (3) the U.S. Department of Transportation, Office of the General 
Counsel, 1200 New Jersey Avenue SE., Washington, DC 20590.

    Decided: November 1, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Brendetta S. Jones,
Clearance Clerk.
[FR Doc. 2016-26724 Filed 11-3-16; 8:45 am]
 BILLING CODE 4915-01-P