Union Pacific Corporation and Norfolk Southern Corporation announced Thursday they had amended their merger application that seeks to create the country’s first transcontinental railroad.
In updated documents presented to the Surface Transportation Board (STB), the railroads said their additional analysis had found the merger would drive growth and lower costs for shippers while strengthening the U.S. supply chain.
“After completing the additional work requested by the STB, the facts remain clear: This merger enhances competition and delivers real public benefits that make America’s supply chain stronger,” Union Pacific CEO Jim Vena said. “Our analysis uses complete systemwide traffic data provided by all Class I railroads to identify even more opportunities for our combined railroad to grow and compete.”
The analysis used in the updated application used 100 percent actual traffic data provided by all six North American Class 1 railroads, the companies said, instead of sample data from the STB. The use of the data makes the application the “most thorough assessment of market and operational impacts ever.”
“This merger is fundamentally about growth,” Norfolk Southern President and CEO Mark George said. “Shippers have been clear about what they value, and the data backs it up. When single-line rail service is available, they choose it. Our combined network will deliver seamless freight moves within and across the Mississippi watershed markets with one Class I railroad accountable from origin to destination.”
Their analysis found that the merger would make rail significantly more competitive with long-haul trucking, taking an estimated 2.1 million trucks off the road. Shifting freight to low-cost rail will save shippers an estimated $3.5 billion per year which the railroads expected would flow through to consumer pricing.
The analysis also found that the merger will preserve customer access to competitive railroad alternatives and will have no meaningful impact on geographic competition or on the availability of routes. Additional growth will create more high-paying union jobs, as well, creating an estimated 1,200 net new union job by the third year, up from the original estimate of 900.