Critics Said the Union Pacific-Norfolk Southern Merger Would Hurt Competition. They're In For a Surprise.

For months, Washington critics of the Union Pacific-Norfolk Southern merger have warned that combining two great American railroads would kill competition and hurt shippers. Last week they got an answer they did not want to hear.

Union Pacific and Canadian National just reached an agreement that does the opposite of what the critics predicted. It expands competition. It opens new routes. It gets American freight moving faster through the country's worst bottleneck. But none of it happens unless the Surface Transportation Board approves the merger.

Start with Chicago. Anyone who has driven through Chicago knows what a mess it is. The rail system there is worse. Freight from every corner of North America crawls through the city, sometimes waiting days to get handed off between railroads. The new agreement gives Union Pacific expanded rights to route trains around downtown Chicago on CN's Elgin, Joliet & Eastern line. What that means is less waiting and faster delivery for shippers. But most importantly, it also means lower costs for the American consumers and manufacturers at the end of the line.
Then look at what CN gets in return. New access to customers in markets where critics warned competition would shrink. New routes connecting Canada to Mexico through Memphis and Eagle Pass. First-time access to Kansas City. That means more competition, not less, and is an additional benefit to consumers across the country.

CN also picks up Norfolk Southern's ownership stakes in the shared terminals in Kansas City and St. Louis, resolving the hand-wringing over who controls what. In exchange, CN agreed to stop fighting the merger at the STB.

This is what a “win-win” type of deal looks like. Union Pacific is showing that a stronger, integrated American railroad can expand competition, open new corridors, and get freight moving before regulators even weigh in. The people who benefit are American workers, American manufacturers, and the families paying for goods at the end of the supply chain.
The Surface Transportation Board should take note. The case for approval keeps getting stronger. The only question left is whether Washington will let America build.