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Albany & Eastern Railroad Co. (AERC) and Burlington Northern Santa Fe recently agreed to binding arbitration to settle a contract dispute involving AERC's purchase of BNSF's 17.4-mile line between Lebanon and Foster, Ore.


In a petition before Surface Transportation Board, AERC claimed that a contract provision precludes it from interchanging traffic originating on its line with Union Pacific Railroad at Albany, Ore., even though the freight is destined for points served only by UP.


So, the 80-mile short line is seeking a waiver to continue interchanging with UP. In response, BNSF agreed to arbitration.


United Transportation Union had filed a petition with STB to intervene in the arbitration determination because union officials believe an arbitration award favoring AERC could result in BNSF losing jobs to UP.


However, STB determined "it would thwart the voluntary and informal nature of the arbitration process to permit outside parties to intervene in the resolution of the dispute," according to the board's written decision.
AERC and BNSF plan to select an arbitrator soon.