STB Rules on BNSF’s UP-SP Merger-Related Service Questions
According to the STB’s decision in Docket No. FD 32760 (Sub-No. 49), BNSF on Feb. 24, 2024, filed a petition requesting that the Board issue an order clarifying that the UP-SP merger conditions give BNSF the right to serve Colorado Materials, a shipper facility located on a UP-owned line in Uvalde County, Tex., known as the Cline Mine Industrial Lead. STB said it is denying BNSF’s request based on the current record, but BNSF can “seek discovery from UP to determine if there is evidence in support of BNSF’s request and, if so, allow it to renew its request in an amended petition.”
The STB In 1996 approved the merger of the rail carriers controlled by UP and by SP, subject to various conditions, which were said to preserve direct and indirect competition that would be lost as a result of the consolidation. The Board in its June 30, 2025, decision (download below), noted that it imposed as a merger condition terms of a UP-SP settlement agreement. That agreement, it said, was intended to help “ameliorate the competitive harms an unconditioned merger would present and to protect shippers that would be losing access to a second rail carrier (2-to-1 shippers) by allowing BNSF to replicate, to a large extent, the competitive service that was lost when SP was absorbed into UP.”
In 2001, UP and BNSF updated the settlement agreement to incorporate additional conditions and in 2002, the Board approved it. According to BNSF, the agreement includes a “non-exhaustive list of 2-to-1 points,” the STB wrote in its decision. That list provides “specific stations and locations, as well as all points on certain rail lines on which both UP and SP could serve shippers prior to the UP-SP Merger,” the STB noted. “BNSF states that, for reasons unknown, neither the Lead nor Blewett, Tex. (where Colorado Materials is located), were specifically listed in the RASA [the updated agreement] or mentioned in the UP-SP Merger conditions as 2-to-1 points.” But BNSF “argues that, nonetheless, Colorado Materials is located at a 2-to-1 point” and “asserts that the Lead was owned by SP and that, prior to the UP-SP Merger, UP’s affiliate, Missouri Pacific Railroad Company (MP), had a trackage rights agreement with SP (SP-MP Agreement) that permitted MP to also provide service on the Lead.”
The STB said that it will allow BNSF “to seek discovery from UP regarding information relevant to whether any facility existed on the Lead or in the vicinity of Blewett at the time of the UP-SP Merger and whether the SP-MP Agreement granted MP the right to provide local service on the Lead or granted MP overhead rights only.” BNSF now has until Aug. 29 to obtain discovery and submit an amended petition “with additional relevant information and argument to the Board for consideration.” UP’s reply would be due by Sept. 29.
Similarly in a separate decision in Docket No. FD 32760 (Sub-No. 48) (download below), the STB also granted BNSF the opportunity to take discovery from UP and to file an amended petition based on any additional information that is obtained. In this case, it is for service to a facility known as Granite Mountain Quarries in the Little Rock-North Little Rock, Ark., area. The Board said it “finds that there is insufficient information in the record to determine if Granite Mountain is a 2-to-1 shipper facility”; however, it also “finds that there is information in the record to suggest that Granite Mountain may have been served by UP and SP’s predecessor at the time of the UP-SP Merger.” BNSF will again have until Aug. 29 to take discovery and submit an amended petition with additional relevant information and argument to the Board for consideration. UP would be be permitted to reply within 30 days of the filing.
