Union Pacific and Norfolk Southern are pitching the US$72 billion cash-and-stock transaction that would significantly consolidate the US freight rail industry as a means to spawn a stronger competitor to trucking.
Current regulations require rail mergers to show that a deal would serve the public interest and enhance competition, a step beyond the requirements in some other industries. The companies argue shifting cargo to rail from trucks will reduce pollution and the burden on taxpayer-funded roads.
Long-haul trucking “dominates” the market, the companies said, citing US government data showing the rail industry saw a nearly 10% decline in market share between 2014 and 2023.
“Without structural reform and bold leadership, rail’s position in the US freight market will continue to erode – no matter how well individual railroads perform,” the companies said in the document.
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