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Justice department's antitrust division to scrutinize BNSF's, UP's coal rates

The U.S. Department of Justice's Antitrust Division recently began investigating BNSF Railway Co.'s and Union Pacific Railroad's pricing practices for coal moving from Wyoming's Powder River Basin mines.

The Class Is have been shifting from long-term, negotiated contracts to set published rates, which some captive coal shippers claim is increasing their freight costs. The division is trying to determine if the pricing practices violate antitrust laws.

"It comes down to ... whether or not we have the right to display these prices or to change out a long-term contract," said BNSF Chairman, President and Chief Executive Officer Matthew Rose at a Feb. 16 investors meeting in Naples, Fla. "We have not been instructed to do anything differently. We don't believe that we will."

The Class Is obtain about 20 percent of their annual revenue from coal business.

Contact Progressive Railroading editorial staff.

More News from 2/18/2005