Union Pacific-Norfolk Southern Merger: Impact on US Rail & Shippers

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Introduction

The Rail Customer Coalition (RCC) communicated its concerns regarding a potential merger between Union Pacific Railroad and Norfolk Southern Railway in a letter addressed to the Surface Transportation Board.

Background and Concerns

In a letter dated September 16, the RCC, representing various sectors including manufacturing, agriculture, and energy, voiced its apprehension to the STB. The coalition highlighted that previous rail mergers have resulted in service disruptions, escalating costs, and employment reductions. The letter emphasized that currently, just four U.S. Class I railroads manage over 90% of freight traffic.

Impact of Consolidation

The RCC’s letter warned that a transcontinental merger could initiate another wave of consolidation within the industry. This scenario, they argued, would diminish the choices available to captive shippers regarding Class I rail companies and competitive joint line options.

Economic Consequences

The coalition expressed its belief that such a merger, instead of stimulating economic expansion, could potentially lead to supply chain disruptions. Furthermore, it could negatively affect the competitiveness of American products in the global market.

Conclusion

The Rail Customer Coalition communicated its concerns to the Surface Transportation Board regarding the proposed merger between Union Pacific Railroad and Norfolk Southern Railway, citing potential negative impacts on service, costs, competition, and the broader economy.

Company Summary

Union Pacific Railroad: A major U.S. Class I railroad.

Norfolk Southern Railway: A major U.S. Class I railroad.

Rail Customer Coalition (RCC): An organization representing manufacturing, agriculture, energy, and other industries.

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