Montana Attorney General Austin Knudsen led a coalition of attorneys general in urging the Surface Transportation Board (STB) to deny the proposed merger between Union Pacific (UP) and Norfolk Southern (NS) freight railroad companies, which would reduce competition and increase costs for Americans.
The letter asks the STB Chairman Patrick Fuchs to deny the companies’ revised application since the companies fail to demonstrate how the merger would serve thepublic interest. While the companies claim the merger will create growth and efficiency through their Committed Gateway Pricing Program, it will not expand what already exists today. Additionally, a merger that creates a company controlling over 50 percent of the rail market raises antitrust concerns and would be detrimental to competitiveness in the American economy.
Earlier this year, the STB ruled the companies’ initial application was incomplete, noting that several aspects were unclear or underdeveloped. Therefore, UP and NS were required to file a revised application to details how the merger would expand competition and benefit consumers.
“At a time when the railroads are prospering financially, there is no reason to create a behemoth railroad that will take more money from farmers, shippers and ultimately consumers in our States and across the country,” Attorney General Knudsen wrote in the letter. “But history has consistently shown us that these rail mega-mergers deliver exactly the opposite to rural America: fewer routing options, higher captive freight costs, and catastrophic supply chain disruptions.”
In May, Attorney General Knudsen sent a letter to the STB urging the Board to reject the initial proposed merger application. In February, prior to the Board’s consideration, Attorney General Knudsen also asked the United States Department of Justice (USDOJ) to review the proposed merger between UP and NS, while the agency does not have final approval, their analysis can provide necessary scrutiny before themerger is finalized. In their findings, the USDOJ noted that the application required additional information before it should be considered by the board.