WASHINGTON — The attorneys general from nine states have asked the Surface Transportation Board to give Union Pacific’s proposed acquisition of Norfolk Southern a thorough review, arguing that the merger will stifle competition, raise rates, and hurt manufacturers and agricultural producers.
“An America First economy will not work if high internal shipping costs kneecap American companies’ ability to compete with foreign manufacturers. The downstream impact of the merger poses significant risk not just for our industrial base but also our agricultural producers. Ultimately, then, this merger could compromise our national security,” the attorneys general wrote in a Nov. 14 letter to the board.
The letter was signed by the attorneys general for Tennessee, Kansas, Florida, Mississippi, Iowa, Montana, North Dakota, South Dakota, and Ohio.
“Our states are home to a diverse and dynamic set of industries, including chemical manufacturing, energy production, and agriculture. These key strategic American industries rely heavily on freight rail to move essential goods safely, efficiently and affordably. Yet, as the railroads have consolidated, many shippers have seen rail service suffer while costs have increased dramatically. Further freight rail consolidation could make these problems worse,” the attorneys general wrote.
UP and NS say their $85 billion combination — which would create the first coast-to-coast railroad in the U.S. — would improve service, take trucks off the highway, increase rail competition, and boost the economy by making American companies more competitive in global markets.
They expect to file their merger application in early December.
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UP and NS say the merger “would improve service, take trucks off the highway” This argument is wearing very thin. Railroads have and will continue to loose market share to trucks until they begin to focus more on the customers and less on Wall Street. And that ain’t going to happen. This merger will only exacerbate the problem. It’ not about customer service or gaining market share, which could be achieved by other means, but squeezing every last cent out of the what’s already there.
Who cares no one tried blocking the CP.KCS merger why is everyone so afraid of this merger for
Where are the concerns from Illinois and Missouri? This is where most of the overlap is.
The “most overlap” as you say is actually very little overlap. Over lap for overlap’s sake does not always constitute a problem. Plus most these state have access to more than one railroad so it is much also about nothing. More a chance for these guys to show their constituents they are actually dooing something besides just collecting a check.
What I find interesting is that I do not think either UP or NS has trackage in North Dakota, or South Dakota, and what NShas in Florida and UP in MT is minuscule.
JAMES – While you are correct, I believe the argument fruom these states is that the merger would diminish interchange options for shippers in those states. Grain going from the Dakotas
(continued) Gulf Coast loses the competition of UP to Texas versus NS to New Orleans. I’m not enough of an expert to know if that’s the best example, but I believe that’s their point.
That or maybe BNSF just asked them to protest it for BNSF’s own purposes. It’s happened before…