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Not less than one rival railroad is doubling down on its opposition to the transcontinental merger of Union Pacific and Norfolk Southern after the businesses filed their former software with federal regulators Friday.
“Whereas we’re nonetheless reviewing the [Surface Transportation Board] submitting and can have extra to say quickly, what we have now seen up to now doesn’t change BNSF’s opposition to the proposed merger,” mentioned Chief Government Katie Farmer, in an announcement. “The transaction poses a major menace to the U.S. financial system and the American client via its long-term aggressive harms. It might depart shippers with fewer choices – driving greater charges and in the end greater costs for customers.
“This didn’t start with clients asking for this merger, and the claimed public advantages seem to accrue primarily to shareholders. Previous mergers display the chance of great service failures with damaging impacts to clients, the U.S. rail community and the American financial system.”
Each UP (NYSE: UNP) and NS (NYSE: NSC) say the tie-up will pace freight throughout their community by eliminating handoffs between railroads at busy interchanges resembling Chicago and St. Louis. The merger will enhance operations and decrease prices for shippers who will solely must cope with paperwork for one railroad.
However some shippers are cautious that the deal will focus an excessive amount of pricing energy with one provider, resulting in greater charges and main service meltdowns that accompanied previous mergers. BNSF earlier dismissed hypothesis that it could pursue a merger with CSX (NASDAQ: CSX); the railroad dropped an analogous settlement with Canadian Nationwide (NYSE: CNI) in 2000 after regulators intervened.
“That is exactly why the STB strengthened its merger guidelines: candidates should now show their deal is not going to solely protect however improve competitors; that it serves the general public curiosity, and its purported advantages can’t be delivered via partnerships,” Farmer mentioned. “BNSF (NYSE: BRK-B) is assured that UP has not met these necessities. UP has a protracted historical past of constructing guarantees in previous mergers that they again away from as soon as they’ve secured approval. BNSF stays centered on reaching these identical advantages via partnership and collaboration which ends up in streamlined service, and larger operational flexibility – delivering actual, quick advantages to clients.”
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Associated protection:
Union Pacific and Norfolk Southern file historic rail merger software
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