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.
“Oh no, the sky is falling, the sky is falling…” And just like Chicken Little, the Sky did not fall.
UP-SP was troubled because no one realized how bad of shape SP really was in. A mess would be an understatement. However UP-NS is not close to the same. Both railroads are in excellent shape, with plenty of business and working to keep customers, shippers AND employees happy. UP isn’t saving NS like they were SP which was about to be declared bankrupt. And years of deferred maintenance hadn’t helped things either. That is not the case here. This is a chance to make better, BEST. Anyone who understands the industry can see that. UP/NS wants to provide everything the Shipping trades and industries have said they have wanted for years. Even the unions have signed on. This time WIL BE DIFFERENT.
The chemical industry was really damaged badly by the UP-SP merger which lasted for a hell of along time. You can bet their testimony will be sharply to the point of the STB refusing the UP-NW merger. And it should be. It has taken years to really smooth out their freight transportaton and they don’t want to go thru that again. Just look at the negative letters the super majority of chemical company presidents has sent to the STB opposing the merger.
In reality the proposed merger is a money grab for the big shots salaries of the 2 railroads. How can there be any other reason.
No, the chemical manufacturers just don’t want to have to pay for having the kind of service they demand. If they had open access, they would play both sides against the middle until nobody wanted their business, And then they will complain about that. They are making billions off of the American consumer. Where is their interest in helping the goose that is laying the golden egg? They would ring its neck of every available penny until it dies.. And then they will complain about that too. And if, as you say, UP and NS are denied, then they will continue too go about their business and the chemical boys will still have no access to other railroads. AND THEN THEY WILL COMPLAIN ABOUT THAT!