A proposed rail merger will not gain shipper backing unless it guarantees better service, lower rates, and stronger competition under federal rules. This is reported by the railway transport news portal Railway Supply.

Union Pacific Railroad has urged Metra to accept a new agreement that reflects market rates for continued use of its tracks before their deal expires on July 1.
Source, photo: www.marketbeat.com

Shippers Warn Against Rail Merger Without Accountability

A major U.S. shipper group has urged regulators to reject any rail merger that lacks concrete commitments to improve performance. The National Industrial Transportation League (NITL) issued the warning after Union Pacific unveiled an $85 billion offer to acquire Norfolk Southern.

Don’t miss…HS1 Performance Rises but Regulator Presses on Assets

NITL criticized past mergers for failing to benefit customers. Captive shippers, who rely on a single railroad, continue to face price hikes and poor reliability. And when delays occur, these customers have no alternatives.

The organization said a nationwide rail merger would increase the market power of large railroads. But unless the Surface Transportation Board (STB) enforces strict competitive safeguards, the result could be higher costs and fewer options for freight customers.

Under the STB’s 2001 merger rules, Class I combinations must enhance competition. So far, the rail industry has done little to meet that standard, NITL argues.

Reciprocal Switching Could Decide Rail Merger Outcome

Industry experts say reciprocal switching may be a key factor in the approval of this rail merger. Shippers have long pushed for rules that allow freight to be transferred between competing railroads. But the rail industry has opposed such mandates, citing cost and complexity.

Union Pacific and Norfolk Southern claim the deal will enhance service and competition. However, they have not shared specifics. Their application is expected by January 29, 2026.

Meanwhile, the American Fuel and Petrochemical Manufacturers warned that the merger could worsen service and increase costs. CEO Chet Thompson noted that the number of Class I carriers has dropped from nearly 30 in 1980 to just six, and this deal would reduce it to five.

According to the group, 78% of members depend on just one rail provider. And surprise service cuts only worsen the problem. Because of these risks, the group wants Congress and regulators to uphold strong antitrust enforcement and maintain a balanced freight rail system.

FAQ

What is a rail merger?

A rail merger occurs when two or more railroad companies combine, potentially impacting pricing, service, and competition.

How could a rail merger affect freight service?

It may reduce competition and reliability if not paired with strict regulatory oversight and switching rights.

Can shippers influence a rail merger decision?

Yes, through advocacy with the STB and Congress, shippers can push for service guarantees and competitive protections. See STB merger rules for more.

Source: www.trains.com

News on railway transport, industry, and railway technologies from Railway Supply that you might have missed:

Don’t miss…High-Speed Railway Tashkent — Samarkand

Find the latest news of the railway industry in Eastern Europe, the former Soviet Union and the rest of the world on our page on Facebook, Twitter, LinkedIn, read Railway Supply magazine online.

Place your ads on webportal and in Railway Supply magazine. Detailed information is in Railway Supply media kit