The merger of rail giants Union Pacific and Norfolk Southern Corporation is drawing the ire of BNSF Railway, which on Monday filed a petition with the Surface Transportation Board (STB) requesting the immediate review and enforcement of conditions imposed during Union Pacific’s merger with Southern Pacific nearly 30 years ago.
The petition seeks to address “UP’s longstanding pattern of obstructive conduct, which has eroded competition and harmed customers,” BNSF claims.
“With UP now proposing another unprecedented merger, this time with Norfolk Southern, the stakes for shippers nationwide could not be higher,” said BNSF Executive Vice President and Chief Legal Officer Jill Mulligan. “Before considering any new consolidation, we ask the board to ensure the commitments made during the UP/SP merger are honored, and that competition is, at a minimum, preserved as required under the prior merger standards.”
Union Pacific Corporation and Norfolk Southern Corporation announced an agreement in July to create America’s first transcontinental railroad—an $85 billion deal that connects more than 50,000 route miles across 43 states from the East Coast to the West Coast, linking approximately 100 ports and nearly every corner of North America. The deal, which still needs STB approval, has the backing of some of trucking’s largest players.
[Related: Schneider, J.B. Hunt pushing shippers to growing rail]
Knight-Swift Transportation (CCJ Top 250, No. 4) voiced its support in September for a proposed merger between UP and Norfolk Southern. C.R. England (No. 32), one of the nation’s largest refrigerated trucking carriers and intermodal logistics providers, also threw its support behind the proposed merger. C.R. England Chief Operating Officer Zach England called a proposed seamless coast-to-coast rail carrier "something we’ve dreamed about for years."
Since the UP/SP merger in 1996, BNSF claims, “UP has repeatedly resisted efforts to preserve competitive rail service, despite conditions established by the STB to protect shippers. BNSF has worked diligently to uphold these rights through negotiations, oversight, and formal petitions, yet UP’s obstruction has left many customers with fewer service options than before the merger.”
BNSF’s petition asks the STB to review the implementation of UP/SP merger conditions, enforce the rights granted to BNSF to maintain competitive access for shippers, and modify conditions as necessary “to prevent further harm and uphold the public interest.”
Additionally, BNSF requests that the board enter a procedural schedule allowing all parties to fully develop the record for the board’s review.
Rail customers depend on fair competition to ensure reliable service and reasonable rates. BNSF has persistently voiced its concerns surrounding UP’s repeated resistance to complying with merger conditions. This must be addressed before any new proposed merger reshapes the industry, affecting shippers and the overall supply chain from coast to coast.
Rail’s changing landscape and its quest for more intermodal share have been hot topics this year. Canadian National Railway Company (CN) and CSX announced the signing of a Memorandum of Understanding in September to develop a new intermodal service into Nashville.
Union Pacific Railroad in September launched a new, truck-competitive domestic intermodal service connecting Southern California’s Inland Empire to Chicago, significantly boosting its intermodal capacity.
CSX Corporation and BNSF last month announced new intermodal services they hope will convert over-the-road freight to rail through a seamless product between the two railroads. A new service between Phoenix, Arizona, and Atlanta, Georgia, particularly targets OTR freight, the rail companies said.
