Coalition formed to fight railroad merger includes direct competitors

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(The Center Square) – A coalition launched this week to oppose the proposed merger between Union Pacific and Norfolk Southern, as both sides ramp up arguments ahead of a renewed filing with federal regulators.

The Stop the Rail Merger Coalition includes BNSF Railway, the only Class I rail company that competes directly with Union Pacific in the West. A Class 1 railroad is the highest classification of freight rail carrier in the U.S. and Canada.

It also includes CPKC, a Canadian-headquartered, single-line rail carrier whose CEO has said it wants to have Canadian and Mexican companies "bypass America and trade with each other."

The coalition says the merger would give one company control over nearly half of U.S. rail traffic and reduce competition, though supporters of the deal disagree.

“This merger would further concentrate monopoly power in an industry already dominated by too few railroads – driving up costs, degrading service, and putting American manufacturing at a serious competitive disadvantage,” Chris Jahn of the American Chemistry Council, another member of the coalition, said in a press release.

The coalition released polling it says shows broad public opposition to the merger.

Supporters of the merger dispute that and other claims being made by the coalition. They say the coalition reflects competitors trying to block the deal.

They point to a split among labor groups. The Teamsters Rail Conference opposes the merger. SMART-TD, the nation’s largest rail union, supports it.

SMART-TD says it secured lifetime job protections for members and guarantees that no train or yardmaster employees would face involuntary furloughs tied to the merger.

Other unions, including the Boilermakers Union, the National Conference of Firemen and Oilers, and the American Train Dispatchers Association, have signed agreements supporting the deal.

A spokesman for Union Pacific and Norfolk Southern released a statement on the coalition. 

"It’s unfortunate these groups are distorting the facts," the statement said. "The benefits for our workforce, our customers and the American economy are clear – our amended, data-backed application, which we'll file April 30 with the STB, clearly reinforces the case for a coast-to-coast railroad, making rail more competitive to other modes of transportation, reducing costs and delivering benefits that will make American goods more affordable.”

Supporters say the merger connects rail systems in different regions rather than eliminating direct competition and could reduce delays on long-distance shipments, thereby reducing costs.

More than 2,000 letters support the merger, proponents say. They say elected officials, manufacturers, farmers, and other shippers submitted them to the Surface Transportation Board.

The companies plan to refile their application with the board this week after regulators rejected an earlier version as incomplete.