UP and NS CEOs Claim Proposed Rail Merger Will Save Shippers $3.5 Billion Annually

Corporate Action
โดย FreightWaves·Read original
Summary · why it matters

Union Pacific CEO Jim Vena and Norfolk Southern CEO Mark George made their first public remarks following a supplemental merger filing with the Surface Transportation Board, arguing their proposed combination would save shippers $3.5 billion a year and remove 2 to 2.2 million truckloads from U.S. highways. The CEOs, speaking at the Trains Magazine Future of Rail Symposium, said their shipper-friendly proposals include expanding committed gateway pricing to double the number of eligible shipments, opening unit train moves to more bulk commodity shippers, and creating a mechanism for shippers to access a competing railroad if service deteriorates during merger implementation. BNSF CEO Katie Farmer pushed back, saying the filing does nothing to change the impact of a railroad that would hold 50% market share of U.S. rail traffic and that the interchange protections are difficult to understand, come with caveats, and apply to very few customers for only a limited time. The merger review is one of the most closely watched rail consolidation proceedings in years, with opponents including BNSF and CPKC arguing the deal would concentrate too much market power, while UP and NS contend that single-line service is two to three times more likely to result in a completed rail move and is 25 to 35% less expensive than a joint-railroad move.

Impact on stocks 3

Industrials± Mixed · 3 stocks
Norfolk Southern Corporation
NSC
▲ PositiveDemandrelevance

NS CEO claims the merger would save shippers $3.5B annually and increase rail traffic, benefiting NS.

Union Pacific Corporation
UNP
▲ PositiveDemandrelevance

UP CEO argues the merger would save shippers $3.5B annually and increase rail traffic, benefiting UP.

Off-coverage companies 1

BNSF RailwayPrivate▼ Negative
Competitionrelevance

BNSF CEO opposes the merger, warning it would give the combined railroad 50% market share and harm BNSF.

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