(BRK.A), (BRK.B)
In a recent development, Berkshire Hathaway’s BNSF Railway has been directed to transport a significant amount of coal from the Navajo Transitional Energy Company’s facility in Montana to Westshore Terminals in British Columbia, Canada. This order comes as a result of a preliminary injunction issued by the Surface Transportation Board on June 23.
According to the ruling, BNSF Railway is required to transport approximately 4.2 million tons of coal from NTEC’s Spring Creek mine to the export facility in British Columbia during 2023. Additionally, as train sets and crews become available, BNSF will need to transport an additional one million tons. This effectively translates to moving 23 trains per month of NTEC’s coal immediately, and an extra six trains per month in due course. To ensure transparency and progress, the Board has mandated weekly status reporting by the parties involved.
The Surface Transportation Board determined that NTEC had a strong likelihood of succeeding in its claim that BNSF had violated its statutory common carrier obligation to transport the requested volume of coal. The Board found NTEC’s request for service to be reasonable, considering BNSF’s historical performance and the railway company’s own statements regarding its capacity to meet the minimum service requirements. The Board also acknowledged the potential irreparable harm NTEC would suffer, including damage to its reputation as a reliable global coal supplier, which monetary compensation alone could not rectify.
In balancing the needs of other BNSF customers, the Board concluded that granting the injunction was not detrimental. It was evident from the record that BNSF could comply with the order while still fulfilling the requirements of other shippers. The Board further recognized the public interest in accessing the rail network and emphasized the critical role NTEC plays in the Navajo Nation’s economy.
Chairman Oberman highlighted the significance of the common carrier obligation, describing it as a core principle governing the freight railroad industry and a key responsibility of railroads to the nation’s economy. The Board’s decision upholds the notion that railroads are held to a higher standard of responsibility compared to most private enterprises. This ruling reflects the majority’s belief that a railroad must fulfill its common carrier duty by providing service within its capacity when requested by a customer.
© 2023 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.