WASHINGTON — More than 60 trade associations have told federal regulators that they fear that Union Pacific’s proposed $85 billion acquisition of Norfolk Southern will raise rates, hurt service, and put too much traffic under control of a single railroad.
“History has shown that increased rail consolidation leads to fewer choices, higher transportation costs, service disruptions, and reduced economic competitiveness,” the associations said in their Nov. 24 letter to the Surface Transportation Board.
The groups urged the STB to give the merger a thorough review. The railroads have yet to file their merger application with the STB, but expect to do so in early December.
“Given the potential for widespread economic harm, it is essential that the Surface Transportation Board proceed with great care,” the groups wrote. “The creation of a transcontinental railroad must not come at the expense of competition, service reliability, or the broader health of the U.S. supply chain.”
Signatories to the letter include the National Industrial Transportation League, the Freight Rail Customer Alliance, and trade associations representing agricultural producers, automakers and vehicle dealers, chemical producers, home builders, mining companies, and forest products companies. The Rail Passengers Association also signed the letter.
UP and NS say their merger will boost competition, improve service, reduce costs for shippers, take trucks off the highway, and allow American importers and exporters to better compete in global markets. They also have pledged a smooth integration process.
— To report news or errors, contact trainsnewswire@firecrown.com.
Promises, promises. They are worth nothing more than the reason for them
If the merger is approved and turns into almost another UP-SP mess and then what does the STB do? Ask for changes or order the merger disallowed?. That would be interesting to see and fatten the hundreds of lawyers wallets that would become involved. And it would cost the two big shots almost nothing.
That in itself is another reason to not allow it.
“UP and NS say their merger will boost competition, improve service, reduce costs for shippers, take trucks off the highway”
Unfortunately history has shown that mergers haven’t taken trucks off the highway. And railroads have mostly refused to cooperate with each other in any meaningful way to gain or keep market share.
Some amount of re-regulation of the rail industry is probably the only thing that will save the industry from its self.
First, it sounds like Mr. Vena has a BIG credibility problem on his hands. He reminds me of the Professor Harold Hill character from the movie “The Music Man”, the way he keeps running his big mouth off all over town.
Second, whatever happened to the November release date for the merger application document. He has now already missed his first deadline. How many more does he mias???
So many more negatives than positives to the acquisition.