BNSF calls for UP-SP merger review amid UP-NS deal

BNSF calls for UP-SP merger review in a new filing with federal regulators, saying the 1996 Union Pacific–Southern Pacific deal has harmed competition in the western United States, as reported by Railfan & Railroad.

In its submission to the U.S. Surface Transportation Board (STB), the railroad says Union Pacific has repeatedly ignored long-standing conditions attached to that merger. Those conditions were meant to preserve competition after the number of major western railroads dropped from three to two.

This is reported by the railway transport news portal Railway Supply.

Why BNSF calls for UP-SP merger review now?

The November 28 filing comes just as Union Pacific is expected to submit its merger application with Norfolk Southern, triggering a Union Pacific Norfolk Southern merger review by the STB. If that deal goes ahead, it would create the largest rail network in the country and its first true transcontinental system.

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BNSF’s attorneys argue that, before the Board approves a new consolidation involving Union Pacific, it should first take stock of the 1996 UP–SP merger and the harms they believe have emerged since then. In the filing, they write that, in the nearly 30 years since the UP/SP merger, Union Pacific has engaged in a pattern of obstructive conduct that has reduced competitive options and harmed customers in the western U.S. These concerns are also set out in an official BNSF news release.

According to BNSF, it has “diligently worked to enforce the rights the Board entrusted to it” through constant vigilance, extensive negotiations with Union Pacific, and numerous petitions to the STB. Yet, the railroad claims, these attempts to protect competition have repeatedly met resistance and obstruction from Union Pacific.

Trackage rights and access disputes in the western U.S.

When the Surface Transportation Board approved the UP–SP deal in 1996, it granted BNSF extensive trackage rights over parts of the combined network so shippers would retain routing options and meaningful competition. Those rights included access to former Rio Grande and Western Pacific routes across Colorado, Utah, Nevada, and California, giving BNSF Railway a way to replace some of the competition lost in the consolidation.

In practice, BNSF says, using those routes has often been challenging. Earlier this year, the railroad asked the STB to require Union Pacific to allow it to start a new intermodal service into Salt Lake City, relying on what BNSF describes as guaranteed trackage rights and access in the western U.S. That request, according to the filing, was one of more than a dozen petitions BNSF has lodged over the years to push Union Pacific to grant access that was supposed to be assured under the original UP-SP merger conditions; a broader pattern of such merger-condition disputes has also been highlighted by Railway Supply.

BNSF argues that these disputes show how difficult it has been to fully exercise the competitive opportunities envisioned in the merger decision and underscore why BNSF calls for UP-SP merger review before any new large-scale consolidation is approved.

Fruita spur case and Union Pacific’s response

The filing also points to a specific case in Fruita, Colorado. There, according to BNSF, Union Pacific tried to require a customer to pay for upgrades to a spur track after the shipper tried to start shipping with BNSF, even though Union Pacific was already using that spur to serve other customers. BNSF presents the Fruita, Colorado spur dispute as another example of how Union Pacific’s actions have made it harder for BNSF to act as a competitive alternative.

Union Pacific, however, defends its record on BNSF trackage rights disputes. In a statement to Railfan & Railroad, a UP spokesperson said the railroad has granted BNSF access on about 85 percent of its requests over the last 15 years, which it says has provided significant opportunities for competition while ensuring that customers have options.

The spokesperson added that, in the relatively few cases taken to the Surface Transportation Board, Union Pacific’s position was that BNSF was asking for more than had been agreed upon. Against this backdrop, the current push in which BNSF calls for UP-SP merger review frames the railroad’s long-running concerns over competition safeguards just as Union Pacific pursues a transformative merger with Norfolk Southern.

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