WASHINGTON, D.C. (RFD-TV) — Several agricultural groups have voiced concerns over competition surrounding the proposed rail merger between Union Pacific and Norfolk Southern.
Zak Andersen with BNSF says its customers share those concerns, particularly in the farm and ranch community.
“BNSF has been opposed to this proposal from the beginning, and it’s not just for the sake of opposing it. It’s what our customers are telling us. Because at the end of the day, we’re a competitive railroad, right? It doesn’t really matter what I think, or what BNSF thinks. It matters what our customers think, and our customers are telling us that they’re very concerned about this deal and very opposed to it, particularly the farm and ranch community. You’ve probably seen that many of the trade associations that represent agriculture in America - Farmers Union, Farm Bureau, National Grain and Feed, The Fertilizer Institute - have all come out strongly opposed to this. The reason why is because, essentially, you’re going to concentrate 50 percent of the market share of the U.S. rail industry in one company.”
Andersen says the U.S. rail industry has already seen too much consolidation, noting the impact would go far beyond the rail lines.
“This transaction alone, and this is especially important for ag country, would create 10,000 closed facilities where the only railroad that serves them is Union Pacific. That can’t feel good if you’re an ag facility in the Midwest. This is already a highly concentrated industry. If you just think about the big four railroads, and you mentioned them-UP, US, NS, and CSX-you essentially have four transcontinental networks. If you’re a shipper today and you’re not single-served, you can choose UP or BNSF, and then once you hit the Mississippi River, you can choose NS or CSX. This merger goes through; that’s over. You’ve got essentially two options at that point, if that. You only have one if you’re in one of 10,000 newly captive locations.”
The National Farmers Union has asked federal regulators to reject the deal, saying the combined railroad would control nearly half of U.S. rail traffic and reduce competition for agricultural shippers.
The group argues past rail consolidations have left farmers with fewer options, higher rates and less reliable service.
