NickD said:
Sadly, in other news, Montana Rail Link is to be no more. Spun off from Burlington Northern in the 1980s, it operated the old Northern Pacific line from Sandpoint, Idaho to Billings, Montana on lease to a gentleman named Dennis Washington. The story I've heard is that at the time, BN was having some real issues with the work force based out of Livingston, and so decided to split the operation off to be run as a shortline and get around the union issues they were having. It was leased on a 60 year lease to Washington, but he has decided to terminate the lease this year and let it be reincorporated back into Burlington Northern Santa Fe as the MRL Subdivision, with all MRL employees making the move over to BNSF.
The reason for terminating the lease is unknown, but a good portion of it is believed to be due to the fact that 90% of the traffic was BNSF traffic originating offline. BNSF would drop off trains at Billings or Sandpoint and MRL would work them to the other end of the line and swap them over to BNSF power. BNSF had actually tried to take back the MRL years ago, but Burlington Northern had given Washington such a lucrative deal that it would have then cost a fortune to buy the lease back. With 90 % of the line’s traffic from the BNSF, the BNSF could threaten to take its traffic somewhere else (the ex-GN line north from Billings). Or Maybe Washington is ready to retire or his children are no longer interested in running a railroad.
The MRL earned a lot of attention during the '90s and '00s due to the rugged scenery and the railroad's love for the 3600hp 645 V20 engine. MRL had a huge fleet of SD45s that they accumulated and even owned a few F45s in the dark blue and white. There are still some end-cab switchers, GP9s, and GP35s, which will all likely bite the dust or be sold off when BNSF takes control again. The GP40s and SD40-2XR rebuilds might hang around, while the SD45 variants, what's left of them, will probably be retired immediately. No one wants to deal with the 45-series anymore.
Its come out that BNSF bought out the Montana Rail Link lease, and analysts have said why BNSF had to do it.
In recent years, BNSF has made significant capacity investments on its routes to and from the Pacific Northwest. To the east of MRL, BNSF built new and extended sidings between Fargo, N.D., and the Billings, Mont., area while adding centralized traffic control and positive train control even though it was not mandated to do so. BNSF also expanded its terminals in Forsyth and Glendive, Montana and Mandan, N.D.
To the west of MRL, BNSF is building a second bridge in Sandpoint, Idaho, to eliminate the single-track bottleneck where MRL and the BNSF converge. BNSF also has double-tracked from Sandpoint to Spokane, Washington, and installed double track and extended sidings from Spokane to Pasco, Washington.
BNSF simply can’t add more capacity on the ex-Great Northern Hi Line across Montana’s northern tier though. There’s just no room to double track where it goes through Kootenai River Canyon.
That brings in MRL. MRL is the old Northern Pacific line from Sandpoint and Jones Junction, near Billings. Darius Gaskins, who was BN’s CEO at the time, insists the MRL deal was necessary. BN didn’t need two parallel mains at the time and due to high labor costs and union-management animosity the decision was made to favor the GN route and lease the NP to Montana Rail Link. “
Since then, while MRL has added capacity, it has not done so at the same pace as BNSF. BNSF could more than double the traffic carried on its route from Fargo to Jones Junction – if not for Jones Junction-Sandpoint capacity constraints on MRL.
There aren’t physical barriers to adding capacity on Montana Rail Link, it's that the lease wording gives the proudly independent regional little incentive to lay new track or hire more train crews to support BNSF volume growth and seasonal traffic surges.
Twenty five years ago BNSF CEO Rob Krebs sought to undo the lease but MRL owner The Washington Companies would not budge. Since then BNSF has taken a carrot-and-stick approach. At times it offered MRL more volume in exchange for capacity expansion projects. At other times BNSF diverted traffic off MRL to the Hi Line. But neither approach, or good faith efforts, could get BNSF and MRL on the same page.
Before the pandemic hit, a traffic surge tapped out capacity on the Hi Line. MRL couldn’t serve as a relief valve because it didn’t have enough crews or sidings. Traffic backed up on BNSF, with congestion raising costs and taking a toll on service. BNSF can’t take full advantage of the millions spent on capacity projects unless the MRL constraint is removed.
So it makes sense for BNSF to take MRL back and they'll likely sink a bunch of money overhauling it and getting the capacity up to balance traffic flow and get freight moving. It will also give BNSF a fallback in the event of traffic disruption from bridge or tunnel failure or weather events.
