August 29, 2023 - TRA Newswire -, 

Hey CPKC, if you want to use UP tracks for your grain trains, you better get a new agreement first. 

That's the contention of Union Pacific. The company wants a federal court in Western Missouri to tell the newly-merged CPKC (Canadian Pacific-Kansas City Southern) they have no right to use UP tracks to haul grain trains from south of Beaumont to ports in Houston and Galveston.

That's because of an old interchange agreement between Union Pacific and pre-merger KCS that only permitted the haul through the Kansas City gateway. UP says that old KCS agreement expired when the CP and KCS merged in April. 

Union Pacific filed the complaint in U.S. District Court in Western Missouri, saying CPKC and KCS are attempting "to make Union Pacific haul their grain traffic on Union Pacific's railroad tracks under a new reading of a 35-year old contract."

CPKC recently sent a grain train from Beaumont to ports in Houston and Galveston over UP tracks that was not interchanged in Kansas City under the old haulage and trackage agreement. After some debate, UP allowed the grain unit-train to proceed so the shipper would not suffer damages. Union Pacific wants the court to rule that the current agreement does not allow this practice on any future.

In the court filing UP said “CP and KCS had repeatedly represented that the creation of CPKC would improve efficiencies by eliminating interchanges between the two companies in Kansas City. Weeks later, CPKC and KCS sent a train to move on Union Pacific’s tracks (south of Beaumont) that had not been interchanged to KCS at Kansas City and was thus not eligible for haulage under the parties’ agreement."

Union Pacific, in the court filing, said that the April 2023 merger eliminated the interchange at Kansas City so CPKC will have to find another means to get upper Midwest grain traffic to Texas ports. 

Earlier in August, CPKC has asked the Surface Transportation Board to settle the dispute by the end of this month so shippers would be able to plan for their fall grain harvest shipping needs. Now the U.S. District Court has been thrown into the argument. 

In the STB filing, CPKC pointed to a 1988 ruling of the Interstate Commerce Commission that approved the Union Pacific acquisition of the Missouri-Kansas-Texas (Katy) Railroad to preserve shipper options.