WASHINGTON — The Surface Transportation Board today approved Montana Rail Link’s plan to terminate its lease with BNSF Railway, paving the way for BNSF to regain control of the former Northern Pacific main line between Jones Junction, Mont., and Sandpoint, Idaho.
Although the STB’s decision is effective on April 7, the date for BNSF to take over remains up in the air. “With the STB decision, MRL and BNSF will begin the transition which is estimated to be complete by the end of the year,” BNSF said in a news release today.
MRL announced in January 2022 that it was terminating the 60-year lease that was scheduled to expire in 2047. The STB decision allows MRL to discontinue service over 656.47 miles of non-contiguous rail line, which are leased from BNSF, and to discontinue MRL’s bridge-only trackage rights over 96.04 miles of rail line owned by BNSF.
The former MRL will become the MRL Subdivision of BNSF’s Montana Division. BNSF has pledged to retain all of MRL’s 1,200 union and non-union employees in their current jobs, with similar pay, benefits, and seniority, and has reached agreements with the labor unions representing MRL employees.
“Joining these two great railroads — both with strong ties and rich traditions — opens new opportunities and broader horizons for our collective teams, our families and the customers and communities we’ve worked together to serve for many years,” BNSF CEO Katie Farmer said in a statement.
Since leasing the trackage from Burlington Northern in 1987, MRL grew to become a critical segment of BNSF’s routes from the Midwest to the Pacific Northwest, part of NP’s “Main Street of the Northwest” main line.
Bringing the former Northern Pacific main line under the control of one railroad will eliminate the need to interchange and enable BNSF to invest in capacity on the route, from train crews to passing sidings.
Montana Rail Link began operations on Oct. 31, 1987, under a 60-year lease from Burlington Northern. BN had excess capacity across Montana, favored the former Great Northern main line, and was saddled with antiquated labor contracts. So it sought to unload the 655-mile former Northern Pacific between Jones Junction and Sandpoint.
BNSF spent about $2 billion to terminate the lease, which it had sought to undo over the years.
Missoula-based MRL remained fiercely independent since it was founded by entrepreneur Dennis Washington. The railroad is part of The Washington Companies, a privately held conglomerate.
MRL ranks among the largest regional railroads in the U.S. and is likely tops when measured by revenue. MRL’s revenue was approaching $500 million in 2020, which prompted the company to ask the STB to raise the $504 million revenue threshold for what constitutes a Class I railroad.
Note: Updated at 12:13 p.m. Central Time with comment from BNSF Railway.
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