UNION PACIFIC AND NORFOLK SOUTHERN’S THIRD APPLICATION ATTEMPT FAILS TO FIX FLAWED DEAL
More Paperwork Cannot Fix a Merger That Would Raise Costs, Cut Competition and Put America’s Supply Chain at Risk
WASHINGTON, D.C. — Stop the Rail Merger Coalition responded to Union Pacific (UP) and Norfolk Southern’s (NS) submission of supplemental information filed today to address serious gaps the Surface Transportation Board (STB) identified in the companies’ merger application.
This marks yet another time UP and NS have gone back to fill holes in their own application. The companies’ original filing was incomplete, and their amended filing fell short. In May, the STB gave the two companies until July 27 to provide new material, saying that “completeness” was not the same as showing a merger was in the public interest. Now, months later, they are submitting a third round of material because regulators keep finding the same problem: this deal does not add up, no matter how it is packaged.
“Union Pacific and Norfolk Southern have had multiple opportunities to show that this merger serves the public interest and enhances competition. They have failed every time,” said the Stop the Rail Merger Coalition. “You cannot paper over a bad deal that fuels monopoly power by giving one company control over nearly half of the rail traffic in the U.S., raises costs on farmers and manufacturers, and puts thousands of rail jobs at risk.”
“UP’s actions keep confirming our assessment that this merger is bad for workers, customers, and our communities,” said Mark Wallace, who serves as the National President of the Brotherhood of Locomotive Engineers & Trainmen and President of the Teamsters Rail Conference. The Teamsters represent the majority of the unionized workforce at what would be the combined railroad.
“Three filings later, the central flaw remains: Union Pacific and Norfolk Southern have failed to demonstrate that this merger will enhance access to competitive rail service,” said Chris Jahn, President and CEO of the American Chemistry Council. “To make America the best manufacturing country in the world, we need more freight rail competition, not a mega-merger that concentrates monopoly power and leaves shippers with fewer choices.”
“The additional data submitted by UP does not change the fact that this would be an anti-competitive transaction between two financially healthy companies, that will raise rates on rail customers and result in higher prices for consumers,” said BNSF President and CEO Katie Farmer.
Big Problems
The Coalition continues to raise the following core concerns with the proposed merger:
- Chokes off Competition: The merger would reduce the number of Class I railroads and feed monopoly power by eliminating competitive options for a broad swath of the U.S. economy, including agriculture, energy, and manufacturing.
- Drives Up Costs for America: Less competition means higher shipping rates — costs that are ultimately passed on to consumers and threaten the competitiveness of American-made goods.
- Threatens Workers: Union Pacific has a long record of cutting jobs after previous mergers, and it continues to reduce its workforce. A UP–NS merger would put even more skilled railroad positions that keep freight moving safely and support America’s economy at risk.
- Weakens the Supply Chain: Consolidation reduces the resiliency, service quality, and flexibility in the freight network, creating weak links that can lead to breakdowns in the nation’s supply chain.
- Unwanted Merger: Nearly three-quarters of Americans oppose the merger after learning about its impacts. That concern is echoed by more than 100 state and federal legislators, attorneys general, and agriculture secretaries who are urging the Administration to hit the brakes.
Track Record of Broken Promises
The new filing comes as the STB continues to sort out problems created by UP’s past mergers and broken promises. The Board’s recent rulings on competitive rail access should serve as a warning as it considers the proposed UP-Norfolk Southern merger. Nearly 30 years after the UP-Southern Pacific merger, UP continues to resist, delay, and curtail efforts to provide the competitive access that was promised to shippers long ago. UP’s track record raises serious questions about whether future merger promises can be trusted without strong, enforceable protections for shippers.
Song Remains the Same
Once again, UP and NS have failed to meet the STB’s requirement that rail mergers must enhance rail-to-rail competition. These requirements were put in place to prevent mergers from crashing the economy.
The Stop the Rail Merger Coalition urges the STB to conduct a full and rigorous review of this application and reject the merger if it fails to meet the Board’s merger standards.