Rail customers convey UP-NS merger concerns to STB

The Rail Customer Coalition (RCC) yesterday wrote to the Surface Transportation Board to express the group's reservations and concerns about the proposed merger between Union Pacific Railroad and Norfolk Southern Railway.

In a Sept. 16 letter, the group — which represents manufacturing, agriculture, energy and other industries — informed the STB that past rail mergers have led to service problems, cost increases and job losses. Today, only four U.S. Class Is control over 90% of freight traffic, the letter states. 

"A transcontinental merger could spark a new wave of consolidation, leaving captive shippers with even fewer Class I rail companies and competitive joint line options to choose from," the coalition wrote. "Rather than fostering economic growth, it would invite supply chain disruptions and make American products less competitive in the global marketplace."

In late July, UP and NS announced that UP would acquire NS in an $85 billion deal that would result in the first transcontinental railroad extending from the West to East coasts. On July 30, the railroads formally notified the STB of their intent to submit a merger application for consideration. 

The RCC's letter takes note of the STB's new rules for examining rail mergers and whether a proposed combination would "enhance" competition and not just preserve it.

"We believe the threshold for enhanced competition should be broadly expanding access to competitive freight rail service, not solely claims that single line service could make certain lanes more competitive with other modes of transportation such as trucking," the coalition wrote.