BNSF Railway Calls for STB Enforcement and Review of Decades-Old UP/SP Merger Conditions as Competitive Concerns Escalate
BNSF Railway has formally petitioned the Surface Transportation Board (STB) to immediately revisit and enforce the conditions established during the 1996 merger between Union Pacific (UP) and Southern Pacific (SP), arguing that nearly three decades of noncompliance by UP have undermined competition, degraded service options, and negatively impacted shippers across numerous regions of the United States. The filing represents one of the most significant regulatory challenges brought by a Class I railroad in recent years and arrives at a critical moment, as UP now seeks approval for another major consolidation—this time with Norfolk Southern (NS).
The petition outlines what BNSF describes as a persistent and systematic pattern of obstructive conduct by Union Pacific, alleging that the railroad has repeatedly avoided, resisted, or failed to comply with merger conditions that were originally put in place by the STB to safeguard competition in the rail sector. These conditions were designed to ensure that UP’s acquisition of Southern Pacific would not lead to reduced service options or create bottlenecks that could restrict access for competing carriers and the customers they serve.
A History of Disputed Compliance Following the 1996 UP/SP Merger
When Union Pacific acquired Southern Pacific in 1996, it became one of the largest consolidations in the history of the U.S. freight rail industry. The STB approved the merger on the condition that UP preserve certain competitive access rights for other railroads, including BNSF. These provisions were intended to protect shippers from the loss of direct service alternatives and to maintain balanced competition across major freight corridors.
However, BNSF now asserts that many of those conditions have not been honored in practice. According to the filing, UP has routinely resisted implementing competitive access granted under the merger agreement and has taken actions that effectively limit BNSF’s ability to serve customers who rely on choice in rail service. The petition asserts that these tactics have had real consequences for shippers, many of whom now have fewer rail transportation options than they did before the merger nearly 30 years ago.
BNSF states that it has made extensive efforts over the years to work collaboratively with UP, seeking negotiated solutions, participating in oversight discussions, and filing formal concerns when necessary. Despite these efforts, the company argues that UP’s resistance has persisted, continuing to harm customer access, stifle competition, and extend the impacts of an imbalance that was supposed to have been prevented when the merger was approved.
BNSF Raises Alarm as UP Pursues Another Major Merger
The urgency of BNSF’s petition is driven in part by Union Pacific’s recently announced proposal to merge with Norfolk Southern, another Class I railroad and one of the nation’s key eastern carriers. If approved, the merger would reshape the industry’s landscape in ways not seen since the UP/SP consolidation itself. Such a deal has heightened concerns among shippers, regulators, and competing railroads about the potential impacts on capacity, pricing, service commitments, and network competition.
“With UP now proposing another unprecedented merger, this time with Norfolk Southern, the stakes for shippers nationwide could not be higher,” said Jill Mulligan, BNSF’s Executive Vice President and Chief Legal Officer. “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.”
BNSF’s concerns highlight a broader tension within the rail industry about the long-term effects of consolidation. Since the 1980s, the number of Class I freight railroads in the United States has fallen from more than 30 to just seven. Mergers have often led to efficiency gains but have also reduced service options for shippers, raising questions about competition, pricing power, and the quality of rail service.
Key Actions BNSF Requests from the Surface Transportation Board
In its petition, BNSF outlines several specific actions it is asking the STB to undertake. These requests aim both to address historic concerns and to ensure that the railroad industry remains competitive—particularly at a time when new mergers are being proposed.
1. Review of UP/SP Merger Condition Implementation
BNSF is asking the STB to reexamine how the conditions set during the 1996 UP/SP merger have been implemented over the past 30 years. BNSF argues that only a detailed review can determine the extent to which UP has fulfilled—or failed to fulfill—its obligations.
2. Enforcement of Competitive Access Rights
One of the most important provisions of the original merger approval was the requirement that UP provide BNSF certain competitive access routes to maintain service options for shippers. BNSF says that these rights have been limited or ignored, contributing to reduced competition. The petition calls for immediate enforcement and stronger oversight to ensure shippers receive the competitive benefits originally promised.
3. Modification of Conditions, if Necessary
Given the evolution of the rail industry, BNSF asks the STB to consider modifying the original merger conditions where needed to prevent further harm. Shifts in freight patterns, capacity constraints, infrastructure changes, and increased shipper demand all factor into the modern competitive landscape, which has changed dramatically since the 1990s.
4. Establishment of a Comprehensive Procedural Schedule
BNSF is requesting that the STB set up a formal procedural schedule that allows all parties—including shippers, regulators, and competing railroads—to provide evidence, respond to filings, and contribute to a complete record for the board’s review.
Such a process, BNSF argues, is essential for transparency and for ensuring that any regulatory decisions are informed by a full understanding of operational impacts.
Implications for Rail Customers and the Broader Supply Chain
At the heart of BNSF’s petition is concern for the shippers who rely on competitive access to rail services to ensure reliable, cost-effective transportation of goods. Rail remains a critical component of the U.S. supply chain, moving everything from agricultural products and energy commodities to consumer goods and industrial materials across thousands of miles of track.
A lack of competition—according to decades of regulatory analysis—can lead to higher rates, reduced service quality, and diminished operational flexibility. Many shippers depend on dual access from multiple rail carriers in order to negotiate fair pricing and ensure timely delivery. When one carrier restricts access or limits interchange opportunities, supply chains can suffer delays, lost productivity, and increased costs.
BNSF argues that these risks are especially consequential now, as UP seeks approval for another major merger that could reshape the competitive landscape even further. Ensuring full compliance with the UP/SP conditions is, in BNSF’s view, essential before any new consolidation is allowed to proceed.
BNSF Emphasizes Importance of Preserving Competition Before Industry Restructuring
The petition underscores a central theme: fair competition is the backbone of a healthy freight rail network. Without it, BNSF warns, the industry risks tilting too far toward consolidation, limiting service options and imposing burdens on customers who are already navigating complex supply chain challenges.
“Rail customers depend on fair competition to ensure reliable service and reasonable rates,” the petition states. BNSF notes that it has repeatedly raised concerns over UP’s resistance to honoring the access conditions set decades ago and stresses that these must be resolved before any further industry consolidation is approved.
The company asserts that protecting competition is not merely a matter of regulatory compliance but a matter of national economic interest, affecting industries and supply chains from coast to coast.
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