Rail Merger Faces More Headwinds As Port Of Mobile Objects

The Surface Transportation Board is not expected to make any final decision on the proposed $85 billion merger between the Union Pacific and Norfolk Southern railroads until at least after the November elections.
The headwinds facing the merger keep growing, though. The Alabama Port Authority (APA) filed a notice of intent to participate in the STB’s review of the proposed merger on September 8. The port said that an initial review “indicates that the UP-NS merger, as currently proposed, could be detrimental to Alabama’s economic interests and many of the state’s rail-reliant industries.” In the coming weeks, APA said it will “continue to engage with its railroad partners, Alabama business leaders and other stakeholders as it finalizes its comments” to the STB.
CEO Doug Otto said, “Our customers, including some of Alabama’s largest industries, depend on rail connections to reach domestic and global markets. As an economic development engine for the state, the Alabama Port Authority has a responsibility to advocate for the businesses we serve and the transportation network they need to grow. We have serious concerns about any railroad consolidation that would limit competition, create the potential for supply chain disruptions and expose businesses to higher transportation costs, particularly at a time when they are already operating on tight margins.”
Strategically located on the central Gulf Coast, the Port of Mobile supports one in seven jobs and has generated more than $415 billion in economic impact across Alabama since 2019.

Rail Rivals Cite Data Corrections
Additionally, three rival railroads filed an objection with the STC on September 14, claiming that the two merger parties are continually correcting the data they initially submitted in their proposal.
The filing by BNSF, CSX and CPKC raised concerns about continued corrections by Union Pacific and Norfolk Southern to their $85 billion merger application. The railroads argue that UP and NS have repeatedly changed key numbers and analysis underlying their application, including changes on back-to-back Fridays, creating a “moving target” for the STB and stakeholders reviewing the deal.
According to the filing, UP and NS have now submitted more than 200 pages of corrections in the past 50 days, while modifying or replacing hundreds of supporting workpapers. Over Labor Day weekend alone, they submitted 2,446 new or replacement files totaling 272 GB of data.
“Whether or not the changes are ‘material’ in the eyes of Applicants, the indisputable point is that Applicants keep finding errors that cascade throughout the application and declarations. Applicants have now submitted more than 200 pages of ‘errata’ in the last 50 days,” BNSF, CSX and CPKC argued in their filing.
They asked the STB to require UP and NS to certify by September 19 that their key diversion analysis and testimony will not change again. If they cannot, the railroads argue that the board should consider “next steps” given that stakeholders are already working toward the November comment deadline.