STB sets compensation terms for BNSF's use of Rosebluff Lead

The Surface Transportation Board yesterday issued a decision establishing compensation terms for BNSF Railway's use of the Rosebluff Lead in the Lake Charles area of Louisiana. The proceedings for the decision date back to 2020.

The Rosebluff Lead is jointly owned by CPKC and Union Pacific Railroad. Terminal trackage rights for the 9-mile lead were first granted to BNSF by the STB in 2016; they originally arose from conditions imposed on the 1996 merger of UP and Southern Pacific (SP), STB officials said in a press release. 

Yesterday's decision determined that BNSF will pay CPKC for trackage-rights use of the Rosebluff Lead, and, except for direct service to a LyondellBasell facility, BNSF also must pay to UP the previously determined fee for trackage-rights use of the Rosebluff Lead. 

In approving the 1996 UP-SP merger, the STB imposed conditions that allowed BNSF to handle traffic from shippers open to UP, SP and Kansas City Southern — now CPKC — in the Lake Charles area, either directly or via reciprocal switching access, at BNSF's election. The STB imposed these conditions to ensure Lake Charles-area shippers had competitive carrier and routing options post the UP-SP merger, according to the press release. 

In 2013, after having served Lake Charles-area shippers via reciprocal switching for nearly 20 years, BNSF sought direct access and filed an application with the STB for terminal trackage rights over the Rosebluff Lead. The STB granted the direct access to BNSF in 2016, finding that it was necessary to maintain competition, and directed BNSF, KCS and UP to jointly develop conditions and compensation for BNSF's use of Rosebluff Lead.

BNSF in 2018 sought to gain direct access to serve a LyondellBasell facility on the Rosebluff Lead, a move opposed by KCS. Despite engaging in private and board-mediated negotiation, BNSF, UP and KCS were unable to reach an agreement on conditions and compensation for BNSF's use of the lead to serve LyondellBasell. Therefore in 2020, the STB established conditions for BNSF to use the lead and set forth proceedings that led to yesterday's decision about the compensation element. 

"[The] decision not only establishes a clear, durable compensation framework, but also strengthens the foundation for continued competitive rail service and infrastructure investment in the Lake Charles region," STB officials said.