BNSF Challenges Union Pacific Over Tehachapi Rail Fees

BNSF is locked in a heated financial dispute with Union Pacific over trackage rights on the Tehachapi line, a key rail corridor connecting Northern and Southern California. This is reported by the railway transport news portal Railway Supply.

Union Pacific claims that BNSF’s current payments are too low, forcing it to subsidize a major competitor. It seeks a fee adjustment that aligns with modern usage and market value.

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BNSF argues that UP’s proposed increase would dramatically raise its costs and weaken competition on the West Coast. The company calls the move a regulatory overreach designed to gain a competitive edge.

BNSF Disputes Trackage Costs and Valuation Methods

At the heart of the disagreement lies how each railroad calculates the value of the line. BNSF insists that the earnings from double-stack traffic, made possible by its own past investments, should not factor into the line’s valuation.

UP maintains that all traffic revenue must be included. It argues this approach better reflects the current importance and utilization of the route.

The two railroads disagree on how inflation should influence payment formulas. BNSF claims UP’s method triple-counts inflation, widening the rate gap unnecessarily.

BNSF Defends Importance of Tehachapi Line Access

BNSF considers the Tehachapi route a vital part of its north-south freight network through California and the Pacific Northwest. The company operates around 20 trains daily along the corridor.

In contrast, Union Pacific runs about 16 trains per day and insists the route’s dense traffic justifies its proposed fees. It also wants annual inflation-based adjustments to ensure fair compensation.

Both companies rely on historical agreements and regulatory precedents to support their arguments. However, their interpretations vary sharply, particularly on how legacy terms apply today.

Unless the companies reach a settlement, the Surface Transportation Board will issue a ruling. The decision may reshape how longstanding access agreements are enforced in today’s competitive rail industry.

Source: www.trains.com

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