BNSF Railway and Union Pacific settled their Salt Lake City trackage rights dispute Tuesday prior to a scheduled meeting with federal regulators.
The deal allows BNSF to begin international intermodal service between Southern California ports and a new intermodal terminal on the Salt Lake Garfield & Western Railway.
In a filing posted on the Surface Transportation Board website Wednesday, the railroads asked the board to dismiss BNSF’s request for an emergency order that would have required UP (NYSE: UNP) to accept the new trackage rights trains.
“BNSF is proud to announce its new intermodal service between California and Salt Lake City. We have reached an agreement and service is currently underway,” spokeswoman Kendall Sloan said in an email to Trains. “This new product offers the capacity to meet market demand and will grow as we move forward. We look forward to serving our customers with this expanded capacity and service.”
The filing did not provide details about the deal the two Class I railroads reached, including what route the trains will take or how many trains will operate per week.
“Union Pacific is pleased with the settlement, which allows us to ramp up service over time and enables Union Pacific and BNSF to efficiently serve our customers,” spokeswoman Jill Micek said in an email.
Last week UP told regulators that it did not oppose BNSF using its trackage rights. But the railroad said it would be unable to handle the trains until it could hire and train additional train crews, which would take months. UP also said the traffic would have to follow the railroad’s directional running pattern, with the eastbound running on the former Southern Pacific main line via Donner Pass in northern California and the westbound using the former Western Pacific through the Feather River Canyon, also in the northern part of the state.
Union Pacific contended that the BNSF trackage rights agreement imposed as a condition of its 1996 acquisition of the Southern Pacific would require BNSF to pay for its share of a 2009 clearance project that UP funded so that the Donner Pass route could handle domestic double stack trains.
BNSF, however, told regulators that the trackage rights agreement stipulation regarding funding clearance work applies only to hi-cube domestic double-stack containers – not to the international containers the new service would handle for liner customers CGM CMA and Mediterranean Shipping Co.
BNSF also had requested that the trains run via the former Western Pacific in both directions, and that the service be allowed to start immediately. The terminal on SLGW opened July 7, and BNSF, its customers, and Utah inland port officials had hoped the service would begin last week.
The STB last week ordered the railroads to participate in a July 15 technical conference where the board would be able to gain more details about the proposed service. The board, in a decision today, approved the railroads’ request to drop the case.
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