The proposed merger of the Union Pacific and Norfolk Southern rail networks faces a lengthy deliberation from the Surface Transportation Board, which must approve it.
The two railroads filed their joint application for the merger with the STB on Dec. 19. The approximately 6,700-page control application included verified statements from 19 company witnesses and independent experts, along with more than 142 gigabytes of supporting workpapers. Pictured at top is the map in the graphic courtesy of Union Pacific.
But obstacles remain. At this writing, two unions, the Brotherhood of Locomotive Engineers and Trainmen and the Brotherhood of Maintenance of Way Employees Division, have withdrawn their tentative initial support for the merger, saying their members worried the deal would increase safety risks, cause service disruptions and increase costs. The two unions together represent more than half of all employees of the two railroads.
The two railroads argue that the application documentation “demonstrates that the proposed transaction presents an unprecedented opportunity to drive growth, enhance competition, and create a more accessible, sustainable, and lower cost supply chain option that will benefit American businesses and consumers.” They claim the merger will create the United States’ “first truly transcontinental rail network” with improvements in speed, convenience and pricing.
Among the claims: the merger will switch 2 million truckloads to rail traffic. Canadian Pacific officials dismissed that claim and said when they asked for corroborating data, they were quoted a price of $399,000, according to Freightwaves. CSX said the “competition” the STB is mandated to uphold means competition among railroads, not between rail and truck.
On Jan. 2, the merger parties supplied a lengthy rebuttal to claims by the National Grain and Feed Association and the four railroads that will remain independent if the merger is approved—BNSF, CN, CPKC, and CSX—that the application material were “incomplete.” The UP said it will supply any additional materials the STB requests. The STB will announce by the end of January whether it will accept the application.
David Murray can be reached at [email protected].
