WASHINGTON — The CEOs of 40 chemical manufacturers warned President Donald Trump today that the proposed Union Pacific-Norfolk Southern merger will reduce rail competition, drive up rates, and make their companies less competitive in global markets.
“You have committed to restoring American manufacturing, strengthening domestic supply chains, and outcompeting global rivals and we … fully support those goals. To achieve them, we require a rail system that delivers for U.S. manufacturers and consumers,” the CEOs, whose companies are members of the American Chemistry Council, wrote in a letter to the president. “That means we need more rail-to-rail competition, not less. We respectfully urge you to continue challenging anticompetitive regulations and support a strong STB that can help build a rail network that supports the needs of American manufacturers and consumers.”
The chief executives said the Surface Transportation Board should be allowed to do its job by giving the $85 billion deal a thorough regulatory review under the 2001 merger review rules that were designed to discourage further consolidation in the industry.
“The STB should reject any deal that fails to clearly demonstrate how it would effectively improve service, increase safety, and enhance rail-to-rail competition,” the chemical executives wrote.
Most chemical plants are served by just one railroad, the executives said, which limits rail competition. It also makes them vulnerable to merger-related service problems, rising rates, and weakened supply chains.
“We have no doubt that combining UP and NS into the nation’s largest railroad will make these problems worse, leaving domestic manufacturers, farmers, and energy producers with fewer choices, higher costs, and less reliable service,” the CEOs wrote.
UP and NS have said that their merger will enhance competition, provide shippers with more options for single-line service, reduce transit times, and lead to volume growth. The transcontinental railroad also will boost the economy and make U.S. importers and exporters more competitive.
They have yet to file their merger application with the STB.
