Teamsters Rail Conference makes its case for the Union Pacific-Norfolk Southern proposed merger to not be approved by the STB

With a merger application for the proposed $85 billion historic merger between Union Pacific and Norfolk Southern expected to be filed with the Surface Transportation Board (STB) this week, more than half of union employees at the railroads indicated they are not in favor of the merger.

That is the word from the Brotherhood of Locomotive Engineers & Trainmen (BLET) and the Brotherhood of Maintenance of Way Employees, whom collectively account for 53% of UP and NS union employees, with the two unions making up the Teamsters Rail Conference.

Should this $85 billion merger be completed, the railroad carriers said it would create the nation’s first transcontinental railroad—which will connect more than 50,000 route miles across 43 states from the East Coast to the West Coast and connect around 100 ports as well.

The Teamsters Rail Conference stated that the proposed merger will make railroads less competitive with other forms of transportation.

“This debt-ridden tie-up won’t make rail more competitive with trucks as merger proponents claim,” said BLET National President Mark Wallace. “We believe this transcontinental railroad will make shipping by rail less attractive as the merged carrier passes off rail lines that serve small towns, factories and farms to short line railroads while running miles-long slow-moving trains on the main line. For rail customers it will be a choice between ‘Hell or the highway.’”     

The unions also pointed to other industry groups that have come out in opposition of the proposed merger, including: an October letter to President Trump led by the American Chemistry Council and 40 of its chemical company members; and an October letter from the Rail Customer Coalition to the STB, with a key thesis of both letters being that railroad mergers do not enhance competition, coupled with weaker service, and job losses, among other factors.

Safety was also viewed as a concern, in regards to the proposed merger, by the unions, saying that merging two railroads with differing cultures carries what they called inherent safety risks. To that end, they observed that NS learned a costly lesson from its 2023 derailment in East Palestine, Ohio. As for UP, the unions said the carrier “continues to cut corners and oppose needed reforms, noting how NS has been experimenting with close call confidential reporting (C3RS), whereas UP has only “offered lip service to C3RS. They added that UP has run extremely long trains, some more than three miles, which contribute to safety and security risks.

As for employment, the unions called out UP, saying the railroad wants the public to believe the new company will value its workers and protect their jobs, describing it as an empty promise. And it noted that the proposals UP have presented to its unions “give the company complete control over who is protected, who is left out, and when any commitments can be changed or taken away.”

Tom Williams, EVP and CMO, at BNSF, observed at last month’s RailTrends conference that the merger will undoubtedly change the industry landscape in some way, if it is approved, adding that the merger’s application will be the first one under the STB’s new merger rules, established in 2001, which state a Class I merger must be in the public interest and demonstrate enhanced competition to be approved, adding that the industry is about to go into what he called unchartered territory.

“This new standard of enhancing competition hasn’t been tested,” said Williams. “We will learn more about what this will mean, but it is a higher standard than had existed before. And if you were around in 2001 the one thing you put a commonsense test to this is that this clause wasn't put out there to protect the interest of non-rail customers. When we think about enhancing competition versus the highway [trucking], I think that does not pass the commonsense test. It is also kind of gaslighting the 10,800 closed stations between up and NS. I hear things no conditions, no concessions, and it's hard for me to get my head around how that even translates to maintaining competition, let alone enhancing competition.

For all practical purposes, there are four transcontinental railroads: UP-NS, UP-CSX, BNSF-NS, BNSF-CSX. And if this transaction is approved, two of those four transcontinental railroads are immediately eliminated. And when you eliminate those two railroads, you effectively eliminate all of the lanes that are associated with those two railroads.”

UP CEO Jim Vena said at RailTrends that there is not a logical reason that the U.S. does not have a railroad that can open up opportunity across the country for customers.

To that end, he raised the questions of, why would the sector want to add 15%, 20%, 25% on a lot of traffic delayed due to handing off from one railroad to the other, as well as would you not want to optimize what's available for customers? And he added that railroad customers compete, not just in America, they also compete against customers from the world.

What’s more, he explained that, post-merger, with a focus on taking trucks off the road, coupled with having an operating plan up and running, with the trucks running today to go from UP to NS by truck, or another railroad through Chicago, will come off and subsequently move via rail the entire way.

As for the customer benefits of a merger, Vena used an example of shipping copper from Arizona to the east coast as being slow and complicated when cargo must be transferred between different railroads, involving many “touch points.” In contrast, a single-line haul—where one railroad handles the shipment end-to-end—is faster and simpler because the cargo stays on the same train.

Regarding customer feedback, Vena said the number of letters showing support for the deal is pretty close to 2,000, with the consensus being they think the deal is good.

“You're always going to get some that stay on the sideline, and you're going to have some that say they don't like it because they're looking for something that they can't get normally in the marketplace,” he noted. “We're going to take the best of the two companies and we're going to remove touch points on cars. As soon as you remove touch points on cars, actually, it's a safer railroad. You don't have to pump them as often; you don't have to switch them as often. You don't have to do some of the steps.”

Addressing labor, Vena said UP came out purposely and guaranteed a job for every unionized person at both UP and NS the day the merger closes, noting they are guaranteed a job for life.

He said there are various opportunities to grow the business through the merger, noting how the watershed area in Mississippi for customers today that truck lumber from the southeast has basically trucked all of it into southern Texas tomorrow because they have to hand off and touch something else tomorrow. And he added that a customer is going to be able to ask UP for a boxcar or a center beam—and UP will be able to move it seamlessly.