Union Pacific-Norfolk Southern Merger: ACC’s Rail Competition Concerns

Introduction

The American Chemistry Council (ACC), representing major freight-rail users, has urged the President and federal regulators to carefully examine the proposed $85 billion merger of Union Pacific Railroad and Norfolk Southern Railway. The ACC’s concerns stem from the potential impact of the merger on competition within the freight-rail industry.

Main Content

American Chemistry Council’s Concerns

The ACC, whose members are significant users of freight-rail services, has formally requested a thorough review of the proposed merger between Union Pacific Railroad and Norfolk Southern Railway. This request was communicated via a letter addressed to the President and federal regulators.

Impact on Competition

The letter, signed by 40 CEOs of chemical manufacturing companies, warns that the merger could negatively affect competition. The signatories expressed concerns that combining two of the largest railroads would concentrate significant market power. Currently, four major railroads control 90% of the U.S. freight-rail traffic, with Union Pacific and Norfolk Southern being two of them.

Potential Consequences

The ACC’s letter emphasizes that a reduction in the number of railroads could limit transportation options. The merger is perceived as a threat to the competitiveness of U.S. manufacturing sites on a global scale. The letter also highlights the service disruptions that followed previous railroad mergers as a cause for concern.

Conclusion

The American Chemistry Council has submitted a letter to the President and federal regulators expressing concerns about the proposed $85 billion merger of Union Pacific Railroad and Norfolk Southern Railway, citing potential impacts on competition and service quality.

Company Summary

American Chemistry Council (ACC): The ACC represents companies involved in the business of chemistry. Its members are major users of freight-rail services.

Union Pacific Railroad: One of the largest freight-rail carriers in the United States.

Norfolk Southern Railway: A major freight-rail carrier operating in the United States.