When two trains attempt to merge into one, who gets to steer? When two railroad giants propose a historic union, who ultimately pays the price? Union Pacific's (UP) proposed $85 billion merger with Norfolk Southern (NS) promises to reshape American rail transportation, but mounting opposition from unions, customers, and competitors has cast uncertainty over this corporate marriage.
Labor Unions: Merger Could Weaken Rail Competitiveness
The Teamsters Rail Conference, representing more than half of UP and NS unionized employees through the Brotherhood of Locomotive Engineers and Trainmen (BLET) and Brotherhood of Maintenance of Way Employes (BMWED), has emerged as the merger's most vocal opponent.
"This debt-laden combination will not enhance rail's competitiveness against trucks as merger proponents claim," BLET National President Mark Wallace stated bluntly. "We believe this transcontinental railroad would actually make rail less attractive by spinning off lines serving small towns, factories and farms to short-line railroads while running extra-long, slow trains on main lines. For rail customers, this becomes a 'hell or highway' choice."
Industry Concerns: Service Deterioration and Job Losses
Beyond labor groups, industry organizations have expressed reservations. The American Chemistry Council (representing 40 chemical companies) and the Rail Customer Coalition previously wrote to both the Trump administration and the Surface Transportation Board (STB), arguing that railroad mergers typically reduce competition while degrading service quality and eliminating jobs.
These groups anticipate that a combined UP-NS would likely streamline operations by abandoning less profitable routes, potentially raising shipping costs for customers while eliminating redundant positions across the merged workforce.
Safety Risks: Cultural Clashes and Operational Hazards
The Teamsters have raised red flags about potential safety implications, citing the challenges of integrating two railroads with distinct corporate cultures. The union notes that NS learned hard lessons from its 2023 East Palestine derailment, while UP continues "cutting corners and opposing necessary reforms."
Specifically, the union highlighted that while NS is piloting the Confidential Close Call Reporting System (C3RS), UP merely pays "lip service to C3RS." Additionally, UP's operation of ultra-long trains (some exceeding three miles) allegedly increases safety and security risks.
Employment Guarantees: Empty Promises?
Regarding job security, unions accuse UP of making hollow assurances. They argue UP's proposal gives the company complete discretion over "who gets protected, who gets excluded, and when any promises can be altered or canceled."
Labor representatives fear that post-merger, UP could implement workforce reductions under the guise of restructuring or efficiency improvements. Even if employment numbers remain stable, workers might face reduced compensation or benefits.
Competitive Landscape: BNSF's Perspective
BNSF Executive Vice President and Chief Marketing Officer Tom Williams recently addressed the merger's potential impact at the RailTrends conference, noting this would be the first major railroad merger application under STB's 2001 rules requiring deals to serve the public interest and enhance competition.
"The 'enhance competition' standard hasn't been tested," Williams observed. "If you apply common sense from 2001, this provision wasn't designed to protect non-rail customers. When considering competition against trucking, this merger fails the common-sense test. It's hard to see how closing 10,800 UP-NS interchange points maintains—let alone enhances—competition."
Williams further noted that America effectively has four transcontinental rail routes (UP-NS, UP-CSX, BNSF-NS, BNSF-CSX), and this merger would eliminate two, along with their associated infrastructure.
UP's Defense: Efficiency Gains and Customer Benefits
UP CEO Jim Vena countered these arguments at RailTrends, questioning why the industry tolerates 15-25% delivery delays caused by inter-railroad transfers when optimization could better serve customers competing in global markets.
Vena explained that merged operations would shift freight from trucks to rails by eliminating transfer points. Using Arizona-to-East-Coast copper shipments as an example, he contrasted today's multi-railroad handoffs with the simplicity of single-line service where cargo stays on one train.
Customer Support and Labor Commitments
Regarding customer sentiment, Vena cited nearly 2,000 support letters, acknowledging some dissenters seeking "what they can't normally get in the marketplace." He emphasized adopting both companies' best practices while eliminating car-handling points to improve safety and efficiency.
On labor issues, Vena stressed UP's guarantee of employment for all union workers from both railroads upon merger completion, with lifetime job security. He highlighted growth opportunities, like capturing Mississippi Valley lumber shipments currently moving by truck due to inter-railroad complexities.
Merger Outlook: Balancing Risks and Rewards
The UP-NS merger presents a complex calculus for regulators. Potential efficiency gains and service improvements must be weighed against competitive concerns, labor impacts, and safety considerations. The STB's ultimate decision will determine whether this corporate union delivers on its promises or derails under its own contradictions.