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On April 18, 1996, UP, BNSF, and the Chemical Manufacturers Association entered into an agreement giving BNSF rights over the UP line between Houston and East St.Louis, paralleling the Houston-Memphis SP line, and allowing BNSF to participate in the UP's plan for directional running, in which each line would serve through trains in only one direction.

UP, in return, got a few short sections of trackage rights over BNSF, mainly connecting the SP at Chemult to the UP at Bend, Oregon, and connecting the SP at Mojave, California with existing UP rights on ATSF at Barstow, California.KCS gained haulage rights to several Midwest locations, including Omaha, East St.Louis, and Memphis, in exchange for BNSF getting similar access to New Orleans.The merger of the operating companies was held up by issues with unions; The Union Pacific-Southern Pacific merger further enlarged the combined BNSF network.Unlike BN and ATSF, UP and SP had significant overlap, where the end of competition between the two risked creating a monopoly for freight carriage in much of the West.

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