Two of the largest U.S. railroad unions won’t back the proposed merger of Union Pacific and Norfolk Southern over concerns the first transcontinental rail system would increase safety risks, push up consumer prices and disrupt the supply chain.
The Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Brotherhood of Maintenance of Way Employes Division plan to announce their opposition Wednesday, a BLET spokesman told FreightWaves.
The railroads have said the $85 billion merger would speed up freight movement by eliminating the interchange, or handoffs, of cars and trains between railroads at congested transportation centers such as Chicago. They contend that a single-line rail network would be more efficient than traditional collaborative agreements between railroads, reducing delays and costs for shippers.
The merger earlier won the backing of President Donald Trump, and UP (NYSE: UNP) earned the support of several other unions in exchange for post-merger job guarantees.
But some shippers including agricultural and chemical trade groups oppose the merger fearing a less competitive market for rail services and prospective disruptions. Western railroad BNSF has voiced its own competitive concerns.
The merger partners expect to file their formal merger application with the Surface Transportation Board later this week.
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