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Railway Age
The National Industrial Transportation League (NITL) on April 30 spoke out on railroad mergers, stressing the importance of “rail-to-rail competition” for captive shippers. NITL, described as “the voice of the shipper” since 1907, “has consistently been on the record as opposing further consolidation in the freight rail industry,” Executive Director Nancy O’Liddy said, hours after Union Pacific (UP) and Norfolk Southern (NS) submitted their amended merger application to the Surface Transportation Board. “As a result of prior mergers, rail competition has been drastically reduced and many NITL members have facilities that are captive to only a single railroad. Despite past promises that rail customers would benefit from mergers through more efficient service, today captive rail customers pay increasingly higher prices for unreliable and inadequate service.”
NITL is said to include U.S. company members who are “engaged in shipping an array of bulk and packaged commodities within the United States and beyond” and “generate roughly $878 billion in gross revenues while spending billions of dollars annually on freight transportation.”
The shipper association said that the second UP-NS merger application “must be denied by the Surface Transportation Board (STB) unless the applicants can transparently demonstrate how the combined railroads will enhance competition and that the benefits of the merger outweigh its harms.” Nancy O’Liddy pointed out that, “for captive shippers, this means increased rail-to-rail competition, not only competition between rail and trucking.”
NITL continued by saying it “welcomed the steps the STB took earlier this year to require UP-NS to provide more information and data to better document the expected impact of the merger on competition, service, other railroads, and more.” It noted that it “will be carefully evaluating the likely impacts on rail customers to determine whether this merger can serve the public interest and enhance rail-to-rail competition given its broad scope and downstream effects.”
NITL is one of eight organizations that on April 29 announced their launch of the Stop the Rail Merger Coalition. In March, the association provided comments to the STB on its Notice of Proposed Rulemaking to repeal 49 C.F.R. part 1144, which governs the prescription of reciprocal switching, through routes, and through rates. “Part 1144 imposes unreasonable burdens on shippers whose facilities are captive to a single railroad and who seek to use the reciprocal switching statute to access a second railroad to obtain competitive, efficient, and reliable freight rail transportation,” the association wrote. “Removing Part 1144 will create new opportunities for competition in the rail industry to be a key mechanism to improve rail service and solve freight rail challenges for the benefit of U.S. manufacturers, farmers, distributors of raw materials, and the American economy.”
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