BNSF Railway on Monday asked federal regulators to intervene in what it describes as nearly three decades of Union Pacific Railroad’s obstruction of competition promised under the landmark UP–Southern Pacific merger, filing a sweeping petition seeking review, enforcement, and modification of the merger conditions.
BNSF’s 106-page filing with the Surface Transportation Board (STB) asserts that Union Pacific has “engaged in a pattern of obstructive conduct” that has eroded the competitive access BNSF was granted when regulators approved Union Pacific’s 1996 acquisition of Southern Pacific — at the time the nation’s largest rail merger.
The STB imposed extensive conditions to prevent shippers from losing choice between two major western railroads.
“With UP now proposing another unprecedented merger, this time with Norfolk Southern, the stakes for shippers nationwide could not be higher,” said BNSF Executive Vice President and Chief Legal Officer Jill Mulligan in a statement. “Before considering any new consolidation, we ask the board to ensure the commitments made during the UP/SP merger are honored, and that competition is, at a minimum, preserved as required under the prior merger standards.”
According to the petition, UP has routinely delayed or denied BNSF’s attempts to serve shippers, frustrated customer elections meant to preserve two-carrier options, resisted updating essential trackage-rights agreements, and used dispatching practices and infrastructure control to disadvantage BNSF trains. The railroad argues that these actions have left many shippers captive to Union Pacific despite the STB’s original intentions.
“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,” the petition states.
The freight rail industry is dominated by a few large carriers, and rail shippers often depend on a single railroad. The STB exists to make sure those railroads don’t abuse that position. It acts as a referee when carriers disagree or when shippers say they’ve been denied fair service.
The STB was created in 1996 when Congress abolished the old Interstate Commerce Commission. It inherited most ICC rail-related powers but operates with more independence and a streamlined mandate.
BNSF cites examples in Texas, Utah, Colorado, and other states where it contends UP imposed “delay and deny” tactics, demanded unnecessary track upgrades, withheld operating-plan approvals, or steered prospective customers away from competitive service.
In more than a third of roughly 200 customer-access elections BNSF has filed since the merger, the company says UP either denied or stalled access, the filing alleges.
The filing also accuses UP of manipulating the siting process for new rail-served industries, negotiating with prospective customers without notifying BNSF — even where BNSF has rights to compete — and imposing dispatching limits that allegedly give preference to UP freight, including at the Eagle Pass border crossing and on the Baytown Branch in Texas.
BNSF argues that after nearly 30 years, arbitration and case-by-case petitions have proven inadequate to protect shippers. The railroad asks the STB to open a full proceeding, allow discovery, solicit shipper input, and ultimately strengthen or revise the UP/SP merger conditions to restore the two-carrier competition regulators originally envisioned.
If granted, the procedural schedule proposed by BNSF would begin with 90 days of discovery, followed by rounds of evidence and statements from BNSF, Union Pacific, and outside parties.
“Without Board intervention,” the petition states, “UP will continue to undermine the UP/SP merger conditions … and deprive shippers of the effective two-carrier competition to which they are entitled.”