Union Pacific Norfolk Southern merger: CPKC, CN warnings

The Union Pacific Norfolk Southern merger is drawing fresh warnings from Canada’s two major rail operators, which say the proposed U.S. tie-up could curb competition and reshape freight flows by creating the country’s first coast-to-coast freight railway.

This is reported by the railway transport news portal Railway Supply.

Why the proposed deal is raising alarms?

In a release issued Friday, Canadian Pacific Kansas City Ltd. said Union Pacific’s planned purchase of Norfolk Southern would “radically” change America’s rail network and carry “extraordinary” risks for customers, workers and supply chains, according to a CPKC statement on the UP-NS filing. CPKC also noted it is the only major railway spanning all three North American countries.

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That same day, Union Pacific filed an application with the U.S. transport regulator, asking for a review of the merger plan. Canadian National Railway Co. echoed the concern in its own Friday press release, warning the Union Pacific Norfolk Southern merger would reduce rail transportation options while creating a single entity that would control more than 40 per cent of the U.S. freight rail market, as outlined in CN’s statement on the UP-NS STB filing.

Scale, market share and wider ripple effects

Other industry players have cautioned that the US$85-billion deal between two of North America’s biggest railroad operators would leave the merged company handling about 40 per cent of American freight and could trigger a final wave of rail mergers across the continent, as previously covered by Railway Supply.

If the acquisition goes ahead, it would join Union Pacific’s extensive western U.S. network with Norfolk Southern’s lines across the eastern half of the country, stitching together more than 80,000 kilometres of track in 43 states and linking to major ports on both coasts.

Promised benefits and union opposition

Union Pacific and Norfolk Southern say the merger would streamline rail service, take trucks off the road and protect union jobs. Even so, two of their biggest unions oppose the move.

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