Washington, D.C. – U.S. Representative Dusty Johnson (R-S.D.) led 47 House colleagues in expressing concerns to the Surface Transportation Board (STB) about the proposed Union Pacific Railroad (UP) and Norfolk Southern Railway (NS) merger. The Representatives urge STB to complete a rigorous and comprehensive review of the merger application to ensure the transaction, if approved, would enhance competition and is in the public interest.
“Competition in the marketplace is healthy. Further limiting the number of competitors on our railways could cause prices to go up, affecting everyone from farmers to shippers to consumers,” said Johnson. “For weeks, I’ve heard concerns from South Dakota groups about the Union Pacific and Norfolk Southern merger application and its potential impacts on service to our state. I am inherently skeptical that consolidation in any market leads to better outcomes for customers. The Board must consider with extreme care the risks posed by the proposal – I don’t want South Dakota farmers, manufacturers, and shippers left behind.”
Background:
- In 2001, the STB “Major Rail Consolidation Procedures” were adopted to outline how any future mergers between Class I railroads would be judged. Importantly, the new rules place a significant burden on would-be merging parties to demonstrate how the transaction would, among other requirements, enhance competition for rail shippers, ensure reliable rail service, and be in the interest of the public.
- Prior to 1980, there were thirty Class I railroads. Today, there are six. This proposed merger could further consolidate an already concentrated rail market, raising concerns about reduced competition, higher costs for shippers, and diminished service.
- This is of particular concern for agricultural and rural states, like South Dakota, with stakeholders who rely on efficient freight rail systems with limited alternatives.
Read the full letter here.
