BNSF urges shippers to question rail merger

BNSF Railway Co., Fort Worth, Texas, is posting information on its website encouraging and helping its customers express opposition concerning the proposed merger of two competing Class 1 freight railroads.

The BNSF campaign concerns the proposed acquisition of Atlanta-based Norfolk Southern Corp. (NS) by Omaha, Nebraska-based Union Pacific Corp. (UP), first announced this July.

“If you have concerns and reservations about the proposed merger between Union Pacific and Norfolk Southern, or you believe that conditions are needed to ensure that the merger is beneficial to you and other shippers, it is important that the Surface Transportation Board (STB) hear from you now and at every opportunity during the regulatory review process,” BNSF says on a section of its website labeled “Preserve Rail Competition.”

The rail firm provides how to electronically file a letter to the STB and offers an email address through which it can send a message to the agency.

According to BNSF, a lack of competition is a potential outcome for some freight rail customers.

“For many shippers and for many origination and destination pairs, there will be no BNSF [or] CSX option because they are served only by UP or NS at origin or destination,” the firm says, adding that the situation will create a new generation of captive shippers.

In the recycling sector, ferrous and nonferrous scrap and old corrugated containers headed for export yards are among the traded commodities commonly shipped by rail.

In the municipal solid waste (MSW) and other sectors, Teaneck, New Jersey-based Interstate Waste Services (IWS) alone has assembled what it calls a strategic network of rail assets, including 1,000 railcars, to transport nearly 2.5 million tons of waste annually to its Apex Landfill in Amsterdam, Ohio.

The waste and recycling firms are among shippers addressed in a document on the NS-UP merger topic posted to the BNSF website titled “Costly, Unnecessary, Anti-Competitive and Bad for the U.S. Economy.”

“Our nation’s supply chain does not need a reduction in competitive options or the risk inherent in integration that we’ve seen happen after almost every Class I merger,” the document says.

While some investment bankers and industry analysts have suggested it is in BNSF’s best interest to merge with rival Class I railroad CSX Corp. of Jacksonville, Florida, the Texas-based railroad expresses disinterest in that move.

"BNSF doesn’t believe the appropriate competitive response is for BNSF to acquire CSX at this time," BNSF says. "We should not be viewed as the fix to correct the competitive imbalance that UP-NS are trying to create. Wall Street and UP would like to force BNSF into a competing merger that creates a coast-to-coast duopoly controlling over 90 percent of our nation’s rail traffic.”