BNSF asks STB to review UP’s compliance with UP-SP merger conditions

BNSF alleges that UP has, for decades, sought to obstruct conditions designed to preserve rail competition in the West

Carrying J.B. Hunt containers, BNSF Railway’s first northbound intermodal train to use the Eagle Pass, Texas, gateway crosses the Rio Grande in December 2023. BNSF claims that Union Pacific favors its own trains at the Eagle Pass, where BNSF operates on trackage rights granted as part of UP’s 1996 acquisition of Southern Pacific. BNSF

WASHINGTON — BNSF Railway has asked the Surface Transportation Board to review Union Pacific’s compliance with conditions that the board imposed to preserve competition after UP’s 1996 acquisition of Southern Pacific.

Due to considerable overlap between the UP and SP systems, the STB granted BNSF the ability to serve customers at so-called 2-to-1 locations, where shippers served by both UP and SP would be served by just UP after the merger.

“In the nearly 30 years since the UP/SP merger, however, UP has engaged in a pattern of obstructive conduct that has diminished those competitive options and has harmed customers by delaying or preventing BNSF from fully replacing the competition that was lost through the UP/SP merger as the Board originally intended,” BNSF said in a Nov. 28 regulatory filing. “Although BNSF has diligently worked to enforce the rights the Board entrusted to it through constant vigilance, extensive negotiations with UP, and numerous petitions to the Board, its efforts have faced repeated resistance and obstruction from UP. Unfortunately, UP’s efforts have been successful in many ways leading to customers having fewer options for service at locations that were previously served by UP and SP.”

BNSF’s petition asks the STB to review the UP-SP merger conditions, “enforce the obligations UP has refused to abide by,” and modify the conditions as necessary.

UP says it abides by the merger conditions. “Union Pacific has granted BNSF access on about 85% of their requests over the last 15 years, providing significant opportunities for competition, while ensuring customers have options,” UP spokeswoman Kristen South said in an email. “In the few cases taken to the Surface Transportation Board, BNSF was asking for more than was agreed upon.”

BNSF’s request comes a week or so before UP and Norfolk Southern are expected to file their merger application with the STB.

“Arguments on the merits of UP’s recently announced merger with Norfolk Southern … will be presented in that proceeding. While the Board will have the opportunity to evaluate the proposed UP/NS merger and its potential impact on competition and other public interest concerns, it is not clear that the Board can review UP’s compliance with the UP/SP merger conditions as part of the Board’s consideration of the UP/NS merger,” BNSF told the board.

BNSF said it has made every effort to compete with UP. “But UP has increasingly sought to frustrate the UP/SP merger conditions and, at times, simply refused to abide by the conditions,” BNSF told the STB.

UP has sought to delay and deny BNSF access to customers, made “unreasonable operational demands,” and refused to update trackage rights agreements, BNSF said. As a result, BNSF says it has been forced to file more than a dozen petitions with the STB to enforce UP-SP merger conditions.

BNSF also claims that UP engages in discriminatory dispatching on its trackage-rights routes. Dispatching protocols in merger agreements require UP to provide equal treatment for BNSF trains, BNSF notes.

Instead, UP favors its own traffic by imposing limited operating windows and disrupting BNSF operations by holding UP trains on a single-track main, BNSF told the STB.

BNSF proposed a 188-day schedule for the board to review, enforce, and modify UP-SP merger conditions as necessary.

Note: Updated at 11 a.m. Central with comment from Union Pacific.

— To report news or errors, contact trainsnewswire@firecrown.com.