The proposed Union Pacific-Norfolk Southern merger faces another important step as the Surface Transportation Board reviews whether the deal would benefit competition.
Union Pacific and Norfolk Southern submitted additional information in July after the STB requested more details before moving forward with its review. Federal regulations say railroad mergers should serve the public interest only when demonstrated benefits, including improved service, safety, competition, and economic efficiency, outweigh potential anticompetitive effects and service disruptions.
The STB has specifically warned that further consolidation among the remaining Class I railroads could reduce geographic competition and create service problems during system integration. That means enhancing competition could be a higher hurdle for the proposed merger than simply maintaining existing competition. The board can require conditions designed to preserve or improve competition if it approves a merger. For agricultural shippers, the outcome could affect railroad service, routing options and transportation costs.
Comments