WASHINGTON, D.C. — The National Industrial Transportation League said today that rail shippers will not support a transcontinental railroad merger unless it’s accompanied by improvements in service, pricing, and competition.
“Despite the promises that rail customers would benefit from mergers through more efficient service, in reality captive rail customers must pay increasingly higher prices for unreliable and inadequate service,” the organization said in a statement issued just two days after Union Pacific announced an $85 billion deal to acquire Norfolk Southern.
‘Further consolidation of the industry will boost railroad profits and benefit Wall Street at the expense of shippers, especially captive rail customers,” the group said.
NIT League said railroads are not held accountable for delays and that sole-served shippers have little recourse when rail service is poor.
“A transcontinental rail merger will expand railroad market power substantially from coast to coast but would not serve the public interest unless substantial competitive enhancements are made and enforced,” NITL said.
Shippers want to see additional rail vs. rail competition, NITL said, noting that enhanced competition is a requirement for any Class I combination to gain approval under the Surface Transportation Board’s 2001 merger review rules.
Many analysts believe that in order to satisfy the enhanced competition requirement, UP and NS will have to offer widespread reciprocal switching — something shippers have long sought and the railroad industry has long fought when switching regulations have been proposed. The railroads say their transcontinental railroad proposal will boost competition, but they have not yet provided details. Their merger application will be filed on or by Jan. 29, 2026.
NITL said it would be evaluating the UP-NS merger’s potential impacts on rail customers while seeking clearly defined and effective STB enforcement mechanisms for enhancing competition.
“Freight rail shippers must benefit from guaranteed, long-term competitive service and service improvements — not just empty promises,” NITL said.
The American Fuel and Petrochemical Manufacturers also weighed in on rail mergers today.
“AFPM and our members have great concerns about further consolidation of the freight rail industry and its impact on consumers. The universe of Class I railroads has already shrunk from nearly 30 carriers in 1980 to just six today. This merger would bring the number down to five. We fear this latest announcement will only compound the service problems refining and petrochemical shippers already face,” CEO Chet Thompson said.
“Unfortunately, freight rail consolidation has coincided with higher rail shipping rates, longer shipping times and more infrequent service — all of which impact operations at refineries and petrochemical facilities, and inflate the costs of everything that moves by rail. We look to the administration, Congress, and the Surface Transportation Board to guarantee and protect a free and competitive U.S. rail system that delivers reliable, affordable, and safe transportation of our products.”
The trade association said that 78% of its members who ship products and feedstocks by rail are only served by a single railroad, citing Rail Customer Coalition data showing that in 2019 half of rail revenue was generated from captive shippers, up from just 27% in 2004.
The group also criticized railroads for making service cuts with little to no notice.
