The Navajo Indian Nation is suing BNSF. They are the third largest coal producer in the US and BNSF is providing lousy service and costing them revenue. Maybe this will wake up the railroads, but I somehow doubt it. The BNSF CEO was recently named Railway Age’s Railroader of the Year. What irony, considering all the bad publicity they’ve gotten this year.
There is a big disconnect between what Wall Streeter’s think is ‘the way to go’ and what reality is to the bulk of the population. Railway Age parrots Wall Street.
“NTEC contends BNSF gave no indication it wouldn’t be able to handle shipping up to 5.5 million tons of coal from its Spring Creek Mine near the border of Montana and Wyoming to a coal export facility in Canada when the companies negotiated a contract for 2022.”
I wonder if the contract specified a commitment for BNSF to haul up to 5.5 million tons of coal for NTEC
I’d guess they bought it. I don’t know of any restrictions on what the tribe can own. If they’re making investments that improve the well being of their members good for them.
I don’t know enogh about their legal action against the BNSF to comment on that specific issue.
Possibly related to this lawsuit and BNSF’s service issues, over the past month a couple of the Montana/Wyoming-Vancouver coal trains have been interchanged to CP at Coutts/Sweetgrass, then taking the Crowsnest Pass and the Windermere valley line before rejoining the CP mainline at Golden. Not sure if this was a one-time thing or a test toward a potential long-term rerouting arrangement. On CP they run as train 809.
As to my question above, they mention a contract to haul coal and they say they wanted to move 5.5 million tons. They say that, at the time the contract was made, BNSF never told them they would be unable to move that much coal.
If the contract did not specify the amount to be moved, the customer would simply be relying on the BNSF to move coal according to the Common Carrier Obligation to reliably move coal on demand.
But if the 5.5 million tons was actually stipulated in the contract, failing to move it would be a breach of contract regardless of the CCO. However, the article is written in a way that mentions a contract to move coal, and an expectation by the shipper to move a specif
I worked on the SW Div @ Gallup 2000-2009. There were lawsuits filed during the 90s and even in the 2000s. wnen I was there. Nothing new. Surprised it took this long for another one to pop up.
I wouldn’t read too much into it…litigation is part of business…Likely both parties have other litigation in process that hasn’t made the headlines. And without litigation there would be no need for the legal profession… [(-D]
I’m not the least bit interested in a lawsuit filed against BNSF for not meeting a contract obligation requiring them to deliver the specified amount of coal. However, what I am very interested in is whether that amount of coal was actually specified in the contract; or it was just requested by the shipper who merely assumed that it would be delivered under the Common Carrier Obligation.
If it were the latter, such a suit would test the Common Carrier Obligation, which is said to lack teeth due to the Obligation being inadequately defined. At this time, with railroads having cut staff to the point of causing failures to meet the CCO; and thus increasing supply chain costs; a definition of the CCO is desperately needed so it can be enforced. That is what I am interested in. This would be in the shippers’ interest, and also in the interest of railroad workers wanting a better quality of Life.
I am also interested in learning why this critical question and answer was left out of the news article.
The average reader at US News probably has no idea of what a common carrier obligation might be.
IMHO, the question isn’t necessarily whether BNSF hauled the coal, it’s whether it hauled enough to satisfy the customer. The question of what is specified in the contract is a valid one. It could be that BNSF met the requirements of the contract but that the customer wanted more hauled.
The article tells us there was a contract to haul the coal. But it does not tell us whether the contract specified how much coal the shipper was requesting to be hauled. However, the article does tell us how much coal the shipper wanted to be hauled. Also, it tells us that the BNSF, upon agreeing to the contract, did not say they could not haul that much coal.
That point would imply that BNSF was aware of how much coal the shipper wanted to be hauled. Otherwise, BNSF could not be expected to tell the shipper that they could not haul that much coal.
So I am left with the rather obvious conclusion that the amount of coal the shipper wanted to be hauled was not in the contract. I guess, in that case, the contract was just to stipulate the price and other conditions for hauling coal over a certain window of time.
Therefore overall; the requirement for the railroad to haul the coal may have been specified in the contract –or- it may have simply been left to the Common Carrier Obligation to haul coal on demand.
If it was only left to the CCO, then BNSF is probably off the hook in the law suit because the CCO is said to lack a clear definition of
[quote user=“Euclid”]
The article tells us there was a contract to haul the coal. But it does not tell us whether the contract specified how much coal the shipper was requesting to be hauled. However, the article does tell us how much coal the shipper wanted to be hauled. Also, it tells us that the BNSF, upon agreeing to the contract, did not say they could not haul that much coal.
That point would imply that BNSF was aware of how much coal the shipper wanted to be hauled. Otherwise, BNSF could not be expected to tell the shipper that they could not haul that much coal.
So I am left with the rather obvious conclusion that the amount of coal the shipper wanted to be hauled was not in the contract. I guess, in that case, the contract was just to stipulate the price and other conditions for hauling coal over a certain window of time.
Therefore overall; the requirement for the railroad to haul the coal may have been specified in the contract –or- it may have simply been left to the Common Carrier Obligation to haul coal on demand.
If it was only left to the CCO, then BNSF is probably off the hook in the l
As Balt suggests, there may be a minumum amount of coal that BNSF agreed to haul for the contract price.
We don’t know what that quantity is/was, and whether the customer wanted to ship more than said quantity and was refused.
If BNSF agreed to haul X tons of coal and did not do so, then it’s breach of contract.
If BNSF agreed to haul X tons of coal, and the Nation wanted them to haul over and above that, it could get gray - but we’d have to see the contract to know.
It could be a matter of BNSF wanting a premium rate for the “over and above” quantities and the customer didn’t want to pay it.
So many variables, so little information. All we’re left to at this level is conjecture.
It is also conjecture as to whether BNSF and the customer had a contract that specified the amount of coal to be hauled. Allegedly, the customer was unexpectedly informed that BNSF could not deliver the amount of coal the customer wanted, we don’t know that the amount wanted was specified in the contract.
Or maybe the coal was delivered in increments, each having their own contract; and the customer’s anticipation of total coal to be hauled was higher than what BNSF actually achieved in the sequence of contracted hauls. In that case, there would be no contract specifying the total amount of coal the customer expected to haul.
In that case, there would be no contract dispute because no contract existed. It is only that scenario that I am interested in. I also think that is the most probable scenario. I am certainly not attempting to resolve a contract dispute by conjecture. My only point is that there may not have been a contract for the total haulage that the customer was contemplating.
All I am saying is that if the customer’s anticipation of coal haulage was not specified under contract, it rests on the principles of the COMMON CARRIER OBLIGATION. If that is the case, this lawsuit
Heaven forbid there was actually a contract in place…
However, we can’t forget the subtitle of the US News article in the original post:
“One of the largest coal producers in the United States has sued BNSF Railway, alleging it breached a contract to transport up to 5.5 million tons of coal overseas”