News / BNSF and CSX signal closer links with new railfreight services

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Warren Buffett-owned US railroad BNSF has expanded its interline partnership with CSX, boosting coast-to-coast operations, with former CSX head Joe Hinrichs rejecting the claim Union Pacific (UP) sought to tap the railroad up prior to its move for Norfolk Southern.

Beginning yesterday, the railroads announced the addition of several new five-day-a-week routes to the interline agreement, linking Los Angeles to CSX hubs in Kentucky, Massachusetts, New Jersey, New York, Ohio, and Pennsylvania.

A BNSF spokesperson said: “These new schedules offer even more immediate value for our customers by increasing speed, flexibility, and options, while delivering integrated service for freight moving across the US.”

There had been expectations of such an expansion of the interline agreement following its early successes, with reports that it had gained some 8% additional volumes, coinciding with a 6.8% drop at Norfolk Southern.

The move comes on the back of rumours that prior to tapping up Norfolk Southern, UP had reached out to Mr Hinrichs to see if a merger between these two railroads could be entertained.

After that rumour was raised with UP CEO Jim Vena last week, Mr Hinrichs took to LinkedIn to dispel the rumour, writing: “Jim Vena never reached out to me regarding UP/CSX.”

He added: “If you read what UP/NS put out you can see their discussions started many months before anything was rumoured publicly. If there were any discussions between me and Vena, they would have had to discuss it in the S-4.

“Jim and I discussed this very subject (why they never talked to CSX) after the UP/NS announcement that they were in ‘advanced talks’ as I asked him why they did not. I will keep that conversation private. There’s your answer.”

Given that the announcement of the UP-NS tie-up in July preceded news of the BNSF-CSX interline agreement, there were claims that the two were interlinked, with suggestions, even, that BNSF-CSX were set to announce a formal merger.

This was roundly rejected by Mr Buffett shortly after the launch of the interline agreement. He told US media he was, however, interested in upping the level of collaboration between the pair.

Even so, the news has caused friction among cargo owners and railroad employees about declining levels of competition on US tracks, with the more than 30 railroads of the 1980s having been cut to the four, soon to be three, today: BNSF, CSX, NS, and IP.