UP, BNSF fighting over fees to switch trains at Nebraska locations

Union Pacific has filed a complaint with federal regulators against BNSF Railway, which it accuses of illegally jacking up so-called “switching rates” at several U.S. locations, mostly in Nebraska.

According to the complaint filed last week with the Surface Transportation Board, BNSF on May 1 canceled the reciprocal rates it charged to Union Pacific for grain trains that start out on BNSF tracks but are later switched to UP tracks.

UP said in the complaint that BNSF eliminated a longstanding $105 per-car unit-train grain rate at certain locations served via reciprocal switching and instead required the company to pay the standard per-car rate of $295, a 281% increase. The change includes locations in Hastings and Lincoln, as well as locations in Iowa and Texas.

The complaint also said BNSF changed per-car rates charged in Grand Island for freight from the JBS plant from $295 to $1,395, a 472% increase.

UP called the moves “an abuse of market power” and is asking the board to “impose a reasonable rate for that switching if BNSF will not agree to one.”

UP also alleged the BNSF is raising the rates only at locations where the railroad “has recently won or grown business from customers located on BNSF’s lines to which Union Pacific has reciprocal switching access.”

“We welcome competition with BNSF on rates and service,” UP said in a statement on its website. “What we cannot accept is a targeted effort to foreclose the competitive options customers have built their supply chains and facilities around.”

BNSF, which has gone on record opposing the proposed $85 billion merger between UP and Norfolk Southern, said in a statement to Nebraska Public Media News that the complaint “is without merit and a transparent effort to distract attention from years of UP competition-defeating behavior that their attempted merger has put a spotlight on.”

“BNSF recently adjusted switch rules that had not been touched in more than a decade and no longer reflected how operations at those facilities work in the real world,” the company said in the statement. “No customer lost access to competitive rail service because of these long overdue and operationally focused changes.”