J.B. Hunt, BNSF in Dispute

J.B. Hunt, BNSF in Dispute

Copyright 2004, Traffic World, Inc.

A 15-year old intermodal partnership struck between two of the country''s largest intermodal players appears to have hit a speed bump.

Burlington Northern Santa Fe Railway told truckload giant J.B. Hunt on July 7 that it was exercising its right to arbitrate the revenue division provided for in the companies'' joint service agreement.

"We have repeatedly pointed out that our intermodal margins have to improve," said BNSF spokesman Dick Russack. "We sought a change in our division of revenues under our joint services agreement with J.B. Hunt. The agreement provides that the revenue division be reviewed quartely. We tried to do this through mediation, but we were unsuccessful, so we''re prepared to go to arbitration."

BNSF would not discuss the financial details, but its contract is estimated to be worth $300 million annually, or about 10 percent of BNSF''s total intermodal business, according to Wall Street estimates.

On the same day as the request for arbitration from BNSF, J.B. Hunt filed a complaint in the Circuit Court of Benton County, Arkansas for declaratory judgment requesting that the court determine the status of the parties under the joint service agreement.

"It is JBHT''s position that the parties are partners, and BNSF has disagreed with that characterization," J.B. Hunt said. However, that complaint has since been withdrawn, according to sources at the Benton County court.

The Atchison, Topeka, and Santa Fe Railway, predecessor to BNSF, inked the deal with J.B. Hunt in 1989 that at the time was considered a landmark agreement in intermodal transportation, the first to link major rail and truckload carriers.

According to J.B. Hunt''s annual report, the number of trailers running over BNSF has grown from 20 loads to over 527,000 in 2003.