The National Farmers Union is calling on the U.S. Surface Transportation Board to reject the proposed $85 billion merger between Union Pacific and Norfolk Southern.
In a September 24 release, the NFU detailed it concerns over giving a single railroad control of nearly half of all U.S. rail traffic, and how that would potentially harm the country's agricultural supply chains.
“History has shown us that when railroads consolidate, family farmers pay the price,” said NFU President Rob Larew. "Decades of mergers have left farmers with fewer options, higher rates, and less reliable service."
That played out in the year that followed UP's 1996 acquisition of Southern Pacific, in a cascading service failure that brought rail freight shipments in parts of the U.S. to a complete halt. During the crisis, many grain and wheat shippers were forced to wait 30 days or more for railcars to arrive, while some in Texas waited as long as three months. The issues were later traced back to UP’s efforts to consolidate freight handling after the merger, which former company officials said overwhelmed railyards in Houston, Texas, and sent delays rippling across the network.
UP and Norfolk's proposed merger is still under review by the STB, after the board rejected the initial application for a lack of projected market-share data, and for failing to include a copy of the full agreement. Although UP claims that the merger would create $3.5 billion in annual savings for shippers, the deal has been widely criticized by competing railroads, rail and transportation unions, and U.S. lawmakers.
