Union Pacific Railroad Company is heading to court in the Western District of Missouri in order to resolve the controversy between Union Pacific and The Kansas City Southern Railway Company regarding the parties’ rights under the “Term Sheet for UP/KCS Haulage/Joint Rate Agreement With Trackage Rights Option,” dated July 25, 1988.

The filing entails the case involving CPKC’s and KCS’s attempts to make Union Pacific haul its grain traffic on Union Pacific’s railroad tracks under a new reading of a 35-year-old contract. In 1988, Union Pacific granted KCS certain haulage rights for grain traffic between Beaumont and Houston/Galveston, Texas.

According to the letter, in April 2023, Canadian Pacific Railway Ltd. (“CP”) merged with KCS to form CPKC. CP and KCS had repeatedly represented that the creation of CPKC would improve efficiencies by eliminating interchanges between the two companies in Kansas City.

UP's complaint alleges CPKC and KCS sent a train to move on Union Pacific’s tracks that had not been interchanged to KCS at Kansas City and was thus not eligible for haulage under the parties’ agreement. Union Pacific ultimately allowed the train to move to its destination to avoid any harm to the shipper, but CPKC and KCS now threaten to send more ineligible trainloads.

Union Pacific says it is seeking a declaration that it has no obligation to move the traffic at issue between Beaumont and Houston/Galveston, Texas, under the terms of the parties’ agreement.

Visit www.progressiverailroading.com to read U.P.'s letter.