BNSF questions Union Pacific’s compliance with Southern Pacific merger conditions

WASHINGTON — BNSF Railway has revived its efforts to serve a pair of quarries located on Union Pacific trackage in Texas and Arkansas.

UP and Southern Pacific served the locations prior to UP’s 1996 acquisition of the SP. As a condition of regulatory approval of the merger, BNSF was granted the right to serve so-called 2-to-1 customers who previously enjoyed service from both UP and SP, as well as new customers in 2-to-1 locations.

But UP has blocked access to the quarries and has argued that they are not eligible facilities under the merger agreements with BNSF.

“Given UP’s intent to pursue a merger with Norfolk Southern, its compliance with past merger commitments is now a matter of heightened public and regulatory importance,” BNSF said last week in a filing with the Surface Transportation Board. “The Board and rail customers should take note — UP has aggressively sought to limit BNSF’s ability to provide the replacement competition that UP agreed to as a condition for the UP/SP Merger. There is every reason to believe that UP will take a similar approach to any conditions placed on the UP/NS Merger, should the Board ultimately approve it.”

In a June decision, the STB said it was not convinced that BNSF had the right to reach the customers as part of conditions granted during the UP-SP merger. The board said BNSF could reopen the cases, however, if it could provide additional historic information about which railroads served the quarries. [See “BNSF fails to convince regulators…” Trains.com, June 30, 2025]

BNSF in February 2024 sought to gain access to Colorado Materials’ Uvalde Quarry in Blewett, Texas, off the former SP Sunset Route west of San Antonio, as well as Granite Mountain Quarries near Little Rock, Ark.

In its separate filings last week, BNSF said UP documents prove that the Texas and Arkansas locations should be eligible for competitive service from BNSF.

BNSF said UP’s efforts to block access to the two locations “is emblematic of a broader pattern of conduct aimed at both eroding the essential competition-preserving bargain that UP struck to obtain Board authority for the UP/SP Merger in 1996 and at preventing UP’s customers from receiving competitive service from BNSF. Over the last quarter-century, BNSF has repeatedly and successfully sought to enforce its rights and its customers’ rights under the UP/SP Merger conditions – all in the face of UP’s continued efforts to limit competition by restricting BNSF access.”

UP says BNSF is seeking more access than what’s covered in settlement agreements between the railroads.

“Earlier this summer, pre-announcement, the Surface Transportation Board decided there was not sufficient information to support BNSF’s case, but gave BNSF a chance to come back and present again,” UP spokeswoman Kristen South said in an email. “BNSF has taken the opportunity to do so and we plan to participate fully, presenting our case to the STB. Our priority is delivering the service we sold to our customers; in both cases, BNSF is asking to expand on more than what was agreed upon.”

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