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Montana Rail Link to end operations, with BNSF taking over

By | January 10, 2022

Memo from railroad president informs employees of move

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A blue Montana Rail Link train works alongside a river with mountains in the background.
A blue Montana Rail Link train works alongside a river with mountains in the background.
Montana Rail Link to end operations: MRL’s westbound Gas Local along the Flathead River between Perma and Dixon, Mont. Tom Danneman photograph

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MISSOULA, Mont. — Montana Rail Link will end its long-term lease on BNSF Railway lines in its namesake state, Idaho, and Washington, with BNSF resuming operation of those routes, MRL President Derek Ollmann told employees in a memo today (Monday, Jan. 10).

No timeline for the changeover was indicated in the memo.

Montana Rail Link said in a press release that while it and BNSF have an agreement in place, the Surface Transportation Board must approve termination of the lease.

“There have been many changes in the rail industry since this long-term lease was signed, and given the need to be competitive in the current environment, we believe that this was the right time to revisit our longstanding agreement with BNSF,” Ollmann said. “This agreement protects our workers, our customers, and our long-term commitment to safety, and it will ensure a more seamless operation of rail services in Montana.”

In the same release, BNSF CEO Katie Farmer said, “We are excited to bring an important part of our railroad’s history back into our operations at BNSF. The line will become the MRL Subdivision of our Montana Division in recognition of the shared heritage of BNSF and MRL.”

Ollmann wrote in the memo that the decision for Montana Rail Link to end operations “was made after a great deal of thought including securing BNSF’s commitment to continue employment for all MRL employees.” Employees will have the ability to remain in their current locations and BNSF will preserve payments that match MRL profit-sharing payouts, he wrote, once an agreement is negotiated.

The memo said an evolving freight environment has left 90% of Montana Rail Link’s freight volume on BNSF trains. Direct BNSF operation will eliminate the need to interchange freight between the two railroads. “BNSF operating the line as part of [its] network will ensure competitive access to global markets while continuing to provide the consistent and reliable service for our customers,” Ollmann wrote.

Ollmann said MRL and BNSF planned to immediately contact union leaders to begin negotiations on labor agreements necessary for the change.

Montana Rail Link was formed in 1987 through the lease of 937 miles of former Northern Pacific Railway trackage between Huntley, Mont., and Sandpoint, Idaho,  from Burlington Northern. It employs more than 1,200 workers. The railroad was founded by Missoula businessman Dennis Washington and is part of The Washington Companies.

— Updated at 9 p.m. CST with comments, additional information from Montana Rail Link press release.

This is a developing story. Follow Trains News Wire for further information as it becomes available.

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30 thoughts on “Montana Rail Link to end operations, with BNSF taking over

  1. What was written in TRAINS MAGAZINE at the time of MRL’s founding was that BN was tired of dealing with the Northern Pacific work force based in Livingston.

    I don’t know how many of those Livingston guys went on to work for MRL. If any, they’re long gone now, decades into retirement.

    1. I remember when control was transferred some BN employee(s) sabotaged the transfer by deleting data pr something. BN had a lot of labor trouble at its Northtown Yard in the Twin Cities too.

  2. “…an evolving freight environment has left 90% of Montana Rail Link’s freight volume on BNSF trains”

    I would, perhaps incorrectly, translate this to mean:

    1/ Class One work rules have evolved to the point that the there are few differences between BNSF and MRL labor inputs;

    2/ There remains so little locally sourced traffic that MRL’s fixed overhead costs, financing costs and reduced purchasing power, when spread over the limited amount of MRL traffic, more than offsets any savings MRL might have formerly generated versus direct BNSF operation

    3/BNSF needs the additional day-to-day operational flexibility across MN and ID,

    4/MRL’s financers are getting nervous about MRL’s long-term prospects, or

    4/(Purely speculative) – BNSF is concerned about someone gobbling up MRL and “ransoming” the operation.

    1. I would definitely say #4 is a NO, since the entire operation is owned and operated by the same person that started it all those years ago. Mr. Washington’s company has plenty of money to continue the operation. I’d also say #2 is a negative, the line always carried overhead BNSF freight, all they’re saying now is that 90% of the freight carried is moving in BNSF trains, which means to me it originates or is destined for markets off the MRL route.

  3. I wanted to go visit MRL’s operations in the Bozeman area this summer. I wonder what the situation will be looking like by then.

    1. Well, Mr. Adams, my unsolicited advice to you is to go ahead with your trip, take a lot of pictures and notes, and submit an article to Trains.

      Good luck,

      Charles

    1. Mark’s? Perhaps you are referring to Mr. Dennis Washington. What happens to the locomotives and freight cars will depend on if the are owned or leased.
      I would expect that the End-cab switchers, GP9s, and GP35s won’t remain in service more than a month. The GP40, SD40-2XRs, and the SDP40-2XRs might last longer in yard or local service. The SD45 variants will be stored within days. The SD70ACe term of service will be more up in the air, they might be repainted and join BNSF’s fleet or they might not, and that would be affected by whether they are owned or leased.

    1. It exists and operates until Washington Group and BNSF reach a final agreement, which must then be submitted to the STB approval. The STB approval will likely take months with the CP-KCS and CSX-PanAm deals already on the STB’s plate for this year.

  4. What a surprise, did not see that one coming. Always wanted to get out a see MRL. Hope BNSF can keep the whole line active.

  5. This seems like an easy move for BNSF as a privately held company to make. Essentially end a lease on the fixed asset you already own and get rid of the interchange on each end..

    What I’m waiting for is BNSF to make a play on CSX or NS to challenge status quo and STB while at some time double down on a trucking outfit. Buffet/Berskshire has a mind boggling pile of cash and a coast to coast logistic network would finally give trucking a run for its money.

    1. This is exactly what CN was doing, buying trucking companies, taking back leased lines and trying to expand their network.
      And then some activist investor put the skids to it out of greed.
      I wish BNSF well since Mr. Buffet/Berkshire does not have to worry about outsiders, well except government.

  6. Keep in mind, BNSF owns the lease. MRL operates within the parameter’s of that lease. A lease is just that. Can be terminated upon mutual agreement at any time. It looks like BNSR has decided that it is time.

    1. Krebs wanted to take back the MRL years ago but the BN gave Washington (the line’s owner) such a lucrative deal that it would have then cost a fortune to buy the lease back. With 90 % of the line’s traffic from the BNSF the BNSF could threaten to take its traffic somewhere else (the ex-GN line north from Billings). Maybe Washington is ready to retire or his children are no longer interested in running a railroad. I’m certainly surprised.

  7. Even though MRL never really owned the tracks and BNSF was running most of the trains there, I will miss the MRL operation.

  8. I got a chance to see some of their operations a few years back when I was in the Billings, MT area. I followed a few trains west of Billings, but they all had BNSF power, so sadly none of my photos of trains out on the main include MRL power. I am not scheduled to go back out the Billings until 2024, so I may be SOL.

  9. I knew several of the BNSF “troubemakers” alluded to above–counting Warren McGee of Livingston and Jim Fredrickson of Tacoma as very close friends (and in Warren’s case as a frequent post-retirement client of my tour company–and Jim Fredrickson as one of my regular tour managers). Both of course were legendary rail photographers, and both fought an heroic battle to keep the Northern Pacific routes open and integrated. On my last visit with Warren in Livingston–long after MRL–he correctly predicted the BNSF would need full control again of the Laurel-Sandpoint mainline. My last day spent with Jim Fredrickson was at the 2011 NRHS Tacoma Convention–where he narrated an NRHS/Amtrak excursion behind the 4449 over Stampede Pass to anyone willing to listen at a table in one of the dome-lounge cars. He had worked for many years at the tiny Lester station on the west side of the pass and noted with some pride even then that BNSF had by then been forced to reopen the (fortunately mothballed) NP over Stampede Pass and to reclaim the mainline from Easton to the Tri-Cities from the Washington Central on the eastside of the summit when wiser heads learned they needed safety valves, capacity and options to keep the traffic flowing. Somewhere in heaven these kind, generous, wonderful and profoundly talented men are together today and smiling!

    1. Why was SP&S abandoned in eastern Washington State?

      So how close dd we come to losing the NP? Could it have possibly joined TRAINS MAGAZINE”s list of the lost lines that should have been kept …. SAL south of Richmond, CRI&P east from Oklahoma to Memphis.

      1. East of Pasco the SP&S had the best-engineered alignment in terms of grades, but suffered from a frequent rock/mud slide problem in the Snake River Canyon and there were multiple tunnels to maintain. But this has always struck me as a particularly poor BN decision (it predated BNSF–as in truth did the MRL lease). Hindsight of course is always infallible.

      2. After the BN-Frisco merger management thought there was little future for railroads and they were anxious to get of all ‘excess’ trackage (also a smaller asset base would make reported return-on-assets’ look better). The SP&S line was also due for new rail and had almost zero online traffic. The economy was in a recession and there wasn’t enough traffic at the time to maintain double track (NP+SP&S) between Spokane and Pasco. It was a decision regretted within a decade. (Currie, ‘Transformation of a Railroad’).

  10. The decision to lease out the former NP was a result of a pissing match (my term) between the BN and the UTU. The people that started the BN were gone and new people (Bressler and Drexler) were in charge and all they wanted to get rid of most trackage not needed immediately. This was an unfortunate decision that many a number of railroads made in the 1980’s Look the selling the the former NP to the RRVW. A big blunder was to give the X-GN trackage near Breckenridge MN to the RRVW. The late Gary Braasch (SOO-BN-BNSF train dispatcher said that Dennis Washington is laughing all the way the bank because once the BNSF trains hit Jones Junction they were on MRL trackage.

    Ed Burns
    Retired NP BN BNSF clerk from Northtown (Minneapolis) and was working 2nd shift before the 1970 merger and saw the first BN 97 arrive.

  11. What’s the probability that BNSF will go to directional running, westbound on the ex-GN route and eastbound on the ex-NP route, or vise versa? If they did that for their long trains it could avoid some capital expense to expand sidings and/or double tracking if only shorter local trains ran against the predominant traffic.

    1. I doubt this would happen due to steep grades in both directions on the NP, but anything is possible. BNSF has always run many freights via the southern route, so the mutual decision to end the MRL lease, combined with the commitment to keep the MRL staff, suggests evolution rather than complete redesign–but anything is possible.

  12. I made a lot of “fan” trips to MRL in the 80’s and 90’s. It’s a very fan-friendly railroad, and even got a tour of the Livingston shops. It will be missed by many, but at least it’s ending up “inside” a great, well-run railroad.

  13. I remember when first started the saying was “Milwaukee Road Lives” as abandoned MLW roadbeds are not too far away!

  14. What will this mean for ANY POSSIBLE CHANCE of a return of Amtrak service to the former NP lines? Southern Montana. Probably NO CHANCE now!

  15. Probably not. I90 and I94 killed NP, BN, and Amtrak passenger trains. Why ride a ride a train when you can jump on the interstate be there quicker.

    Ed Burns, Retired NP, BN, BNSF Clerk from MInnepolis.

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