Coalition Forms to Oppose Union Pacific–Norfolk Southern Merger, Citing Competition and Cost Concerns

A newly formed coalition of industry groups, labor organizations and rail competitors launched to oppose the proposed merger of Union Pacific and Norfolk Southern, stating in a press release that the deal could reshape the U.S. freight rail system by concentrating market power and increasing costs for businesses and consumers.

Norfolk Southern has a major presence in Cobb County, with a rail yard on Garrett Memorial Highway in Austell.

The group, called the Stop the Rail Merger Coalition, said the combination would create the largest railroad in U.S. history, controlling nearly half of the nation’s rail traffic and reducing competition across key sectors of the economy.

Members include the following organizations and corporations

• American Chemistry Council
• American Farm Bureau Federation
• Teamsters Rail Conference
• BNSF Railway
• CPKC Railway
• Alliance for Chemical Distribution
• National Industrial Transportation League
• Vinyl Institute

According to the news release, the coalition joins more than 100 state and federal policymakers, including attorneys general and agriculture officials, who have raised concerns about the merger and urged federal regulators to block or reconsider it.

A national poll commissioned by the coalition and conducted by McLaughlin & Associates found widespread public opposition to the deal. According to the survey, nearly 71% of Americans oppose the merger after learning about its potential impacts, while about 20% support it.

The poll also found that most respondents believe the merger would increase shipping costs, raise prices on everyday goods and negatively affect jobs. About 68% said they believe any cost savings would not be passed on to consumers or businesses, and roughly 54% said they would be more likely to support political candidates who oppose the merger.

“Farmers and ranchers rely heavily on rail service to get products to families across the country,” said President of the American Farm Bureau Federation Zippy Duvall. “This merger would lead to greater consolidation and higher costs when farmers are already hard-pressed with economic headwinds beyond their control. Ultimately, those costs ripple far beyond the farm gate, impacting not only the price of food for Americans, but also likely pushing farm margins even lower.”

Labor leaders also warned about workforce impacts and service reliability. “Union Pacific has yet to make the workforce commitments necessary to maintain network reliability or protect the communities and customers that depend on this rail system,” said Teamsters Rail Conference President Mark Wallace. “Merging two Class I carriers of this scale without binding employment guarantees is not a business decision. It is a gamble with the nation’s supply chain and the workers who keep it moving that ultimately the American taxpayer will have to bail out. The Teamsters Rail Conference will not stand aside while railroad executives hollow out the workforce and wreck our national freight rail system and call it progress while Americans suffer the consequences.”

Industry executives echoed those concerns, pointing to potential long-term impacts on competition and supply chains. “Opposition to the UP–NS merger proposal continues to grow across a broad range of stakeholders, including rail shippers and customers, business associations, unions and labor groups, railroads, elected officials, community leaders and more,” said Keith Creel, president and CEO of CPKC. “All of them have deep and widespread unease about the implications of this unnecessary mega-merger on rail competition, affordability, supply chain reliability, and market balance. The U.S. rail network supports the strength and vitality of the American economy and its future is at stake. This decision is irreversible – it is imperative the Surface Transportation Board hears from all concerned parties. Now is the time to make your voice heard.”

“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,” said President and CEO of the American Chemistry Council Chris Jahn. “To bring jobs home, strengthen supply chains, and lead globally, we need more rail-to-rail competition and reliable service—not a rail monopoly that undermines the industrial comeback underway in this country.”

“This did not begin with a customer asking for a UP-NS merger to happen,” said President and Chief Executive Officer of BNSF Railway Katie Farmer. “It’s driven by Wall Street on the promise of a big shareholder payout. It will eliminate competition, raise costs for consumers, and destabilize the supply chain that powers the American economy.”

The coalition also pointed to the historical example of the 1996 Union Pacific-Southern Pacific merger, arguing that earlier commitments to preserve competition were not fulfilled and led to service disruptions.

“The lesson is simple: merger promises are easy to make, but hard to enforce once the damage is done,” the coalition said in its statement, adding that there is little reason to expect a different outcome if the current merger is approved.

The proposed merger is expected to face scrutiny from the Surface Transportation Board, which must determine whether the deal would enhance competition and improve rail service. The coalition argues the proposal falls short of that standard and should be rejected.

To read an article in support of the merger, follow this link.