Reactions to the Union Pacific-Norfolk Southern merger filing began collecting shortly after the 6,992-page, four-volume document was released, with most expressing skepticism about the benefits of the first transcontinental merger.
Trade groups representing shippers, which had previously indicated concerns about the merger, renewed statements of opposition after the Dec. 19 filing by UP (NYSE: UNP) and NS (NYSE: NSC).
Chet Thompson, president and chief executive of the American Fuel & Petrochemical Manufacturers, said in a statement that while his group needs “competitive, efficient, and reliable rail networks … decades of bad service and price increases in the wake of freight rail consolidation leave us and other carload shippers highly skeptical of this merger. Unless the Surface Transportation Board can demonstrate conclusively that it will enhance competition across all modes of transport – especially between railroads – this merger application should be denied.”
Alliance for Chemical Distribution CEO Eric Byer’s statement said his organization “strongly opposes this merger proposal as it will expand monopolistic control of freight rail at the expense of America’s crucial chemical supply chain.”
The Fertilizer Institute’s statement said the fertilizer industry faces “a take-it-or-leave-it” approach from railroads, and seeks a balanced relationship between carriers and shippers. “While we are still reviewing [the] STB filing,” the statement reads, “it is difficult to see how any coast-to-coast merger would improve this imbalance or meet the standard set out in the Surface Transportation Board’s merger rules.”
The first elected official to weigh in was U.S. Sen. Tammy Baldwin (D-Wisc.). In a press release, she said, “Approving this merger would take us in the wrong direction – stifling competition, worsening service, and raising costs on consumers and businesses who are already facing growing headwinds because of the Trump Administration.”
A statement from U.S. Rep. Sam Graves (R-Mo.), chairman of the House Transportation and Infrastructure Committee, said the railroads’ promise in the merger application “to significantly invest in a more efficient rail network, increase safety, and enhance competition is encouraging. However, with a merger of this size, I want to ensure the STB is deliberative in assessing what potential effects this would have on the system as a whole.”
Rival Canadian National (NYSE: CNI) in a statement said that the application “fails to demonstrate that the merger would enhance competition or generate significant public benefits that would require a merger. It falls well below both the 2001 and old merger rules set out by the Surface Transportation Board.
“Protecting competition is not optional, it is essential to keep costs down and the economy sound. The fact is that this merger would reduce rail transportation options for customers while creating a single entity that controls more than 40% of the U.S. freight rail market. Without real railroad competition, prices go up and consumers lose.”
Union reaction to the merger has been split.
The American Train Dispatchers Association cited confirmed job losses among dispatchers, potential relocation of its members in Atlanta, where NS headquarters are located, and what it called “unresolved safety and workforce concerns embedded in the merger application.” The application projects a net loss of 33 dispatching jobs.
“These job losses are not a coincidence,” ATDA President Ed Dowell said in a statement. “They are intentionally built into the merger plan and tied directly to expanding dispatcher territories and consolidating operational control by leveraging unregulated technologies. These cuts, driven by Wall Street, jeopardize the very safety and efficiency the railroads claim to improve. … [W]e will not support this merger as long as it is paid for at the expense of our members’ livelihoods or the safety of the general public.”
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Related coverage:
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STB asks comments on ‘completeness’ of rail merger application
UP, NS: Merger will create 10,000 single-line service lanes, shift 105k truckloads to rail
BNSF CEO: Rail merger still a “significant threat” to economy, consumers
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