A Union Pacific Railroad executive said the railway plans to increase its services and infrastructure investments nationwide if a proposal to acquire Norfolk Southern Railway for $85 billion is approved.
The move would create a single-line railroad linking the East and West coasts.
But a rail industry coalition — including Fort Worth-based BNSF Railway — are opposed to the merger, claiming the deal would hurt competition by giving one single entity control over almost half of the nation’s rail traffic.
The Surface Transportation Board is expected to make a decision on the proposed rail merger by early 2027.
If approved, the merger would create a seamless network for freight transportation and help reduce truck traffic on the nation’s roads, said Eric Gehringer, Union Pacific’s executive vice president of operations.
“We’ll have one combined network,” Gehringer said. “We will route the (rail) cars in what is collectively the best route versus trying to get two entities, (that) are dynamic railroads, to agree and hold that agreement. That’s why you see example after example of inside the rail industry and outside the rail industry where those agreements — they simply are not sustained.”
Gehringer made his comments during the 22nd annual Southwestern Rail Conference Monday at the Hurst Conference Center.
Seven new daily services will be added if the merger is approved, Gehringer said.
Union Pacific is planning to invest $2.1 billion in the first years of the merger, including new technology to improve rail safety, Gehringer said.
“I’m not going to integrate the two railroads right away,” he said. “We’ll have a plan, it will be well thought out. We’ll have all of the changed management in place and we will make one adjustment after the next in line with safety, in line with service, in line with growth. We’ll make sure those changes, as we make them, demonstrate the outcome that we expected. If we have to adjust, we’ll adjust.”
The Stop the Rail Merger Coalition, composed of railroad operators, customers and workers, said the merger could drive up costs for manufacturers, farmers and consumers.
“This did not begin with a customer asking for a UP-NS merger to happen,” Katie Farmer, president and CEO of BNSF Railway, said in a statement. “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.”
Keith Creel, president and CEO of CPKC railroad, said in a statement that the proposed merger continues to gain opposition.
“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,” Creel’s statement read. “The U.S. rail network supports the strength and vitality of the American economy and its future is at stake.”
Gehringer said the merger would not create a behemoth railroad company.
“We are not going to have an outsized position in the market,” he said. “We’re going to have the exact same position that BNSF has had for many, many years.”
Eric E. Garcia is senior business reporter at the Fort Worth Report. Contact him at eric.garcia@fortworthreport.org.
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