Attorneys general in three states are asking federal regulators to approve the proposed merger between Union Pacific and Norfolk Southern. Their letter comes one week after nine other Republican attorneys general raised concerns about the deal.
Nebraska Attorney General Mike Hilgers, Georgia Attorney General Chris Carr, and West Virginia Attorney General J.B. McCuskey sent their letter to Surface Transportation Board Chairman Patrick Fuchs. They told the board the merger would improve freight rail service nationwide.
“The merger of Union Pacific and Norfolk Southern will only further strengthen the efficiency, reliability and effectiveness of our freight rail system,” the attorneys general wrote.
Their letter said the combined company will bring “more than 50,000 miles of track under one umbrella,” connect 100 North American ports, and expand operations in 43 states. They said the merger will eliminate car touches and interchange delays, and move freight “faster than ever and at a lower cost.”
The letter also said freight rail is “between three to four times more fuel efficient than trucks” and can “play a significant role in reducing the transportation sector’s emissions.” They said the merger will support “economic vitality and environmental sustainability” and said it is “projected that all this will increase freight rail demand and thus increase the number of jobs at the newly-formed company.”
The attorneys general also noted that “the nation’s largest railroad union has announced its support for the merger.”
Their endorsement creates a split among Republican attorneys general.
Last week, nine attorneys general told the Surface Transportation Board they were worried the merger “will result in undue market concentration that stifles competition and therefore creates higher prices, lower reliability and less innovation at the expense of America’s manufacturers and, ultimately, America’s consumers.”
They also said higher costs could “kneecap American companies’ ability to compete with foreign manufacturers” and warned of “downstream impact” on agriculture. That letter stoped short of asking regulators to block it.
Union Pacific has said it will file its full application with the Surface Transportation Board soon. The railroad said in a recent statement it looks forward to showing how the merger “meets the threshold of advancing public interest and enhances competition,” Union Pacific also said it has secured support from key unions and other groups to “ensure rail is not left behind.”
Shareholders for both companies have approved the agreement. The federal review process will likely take a year or more. The Surface Transportation Board will decide whether the merger meets federal standards for major rail transactions and whether it maintains competition in the freight rail market.
