Rail Merger: UP CEO Says it’s BETTER for Consumers | FreightWaves Today

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6}#fwtv_gKqwZVOgDj4. fwtv-panel p{margin:0 0 12px}#fwtv_gKqwZVOgDj4. fwtv-transcript p{margin:0 0 12px}SummaryView TranscriptRail traffic is UP, but the biggest story in North American rail is the proposed CPKC-KCS merger.

We unpack the latest AAR data and hear why Union Pacific and Norfolk Southern CEOs believe this merger will be *better* for consumers, improving service, lowering costs, and bringing trucks off highways. But competitors aren’t convinced. Get the full breakdown of rail volumes and the heated merger debate.

Union Pacific CEO Jim Vena and Norfolk Southern CEO Mark George made their first public remarks following Monday’s supplemental merger filing with the Surface Transportation Board, telling the Trains Magazine Future of Rail Symposium that their proposals are shipper-friendly and that the combined railroad will deliver broad cost savings.

The filing is a pivotal moment in one of the most closely watched rail consolidation proceedings in years, with opponents including BNSF and CPKC arguing the deal would concentrate too much market power. At the core of the UP-NS argument is single-line service.

Bill Steeves, editor of Trains Magazine, who moderated discussions with both CEOs, noted that shippers are two to three times more likely to complete a rail move when it involves a single railroad versus an interchange. Single-line service also runs 25 to 35% less expensive than a joint-railroad move, according to figures cited in the merger application.

The applicants project $3. 5 billion in annual savings for shippers and the removal of 2 to 2. 2 million truckloads from U. S. highways.

The supplemental filing proposes expanding committed gateway pricing to cover double the number of shipments currently eligible, opening unit train moves — typically bulk commodities like grain — to more shippers, and creating a mechanism for shippers to access a competing railroad if service deteriorates during merger implementation.

Vena expressed confidence the deal will be approved, calling it better for consumers through improved service that would lower costs relative to trucking. “Single-line service is, you know, 25 to 35% less expensive than a joint railroad move because those costs come out — and so that is their argument, that that will save shippers $3.

5 billion a year in terms of bringing trucks off the highway to this new transcontinental railroad,” Steeves said, summarizing the UP-NS case.

BNSF CEO Katie Farmer pushed back sharply, saying in a statement that the new filing “does nothing to change the impact of a railroad that would have 50% market share of US rail traffic,” and that the interchange protections on offer are difficult to understand, come with caveats, and apply to very few customers for only a limited time.

BNSF has argued that commercial alliances — such as its partnership with CSX — can be equally effective at pulling freight off trucks without the competitive harm of a full merger. On the week’s AAR traffic data, North American rail carloads rose 3. 8% in week 29, ahead of the prior four-week pace of 2. 7%, while intermodal decelerated to 2. 6% from 6.

5% over the same comparison period. In the U. S. , intermodal grew 3. 5% year over year for the week but slowed sharply from the 9% pace of the prior four weeks. Union Pacific stood out, posting an 8.

2% volume gain for the week — more than double any other Class 1 — driven by record domestic intermodal performance for what the company said was a fourth consecutive quarter, with private-asset, rail-owned container, and parcel moves all up, plus share gains in international business previously moving on BNSF.

On the Canadian railroad front, CPKC was set to report earnings later in the day, while CN has already signaled it believes U. S. -Canada-Mexico trade tensions will resolve rationally, though Steeves acknowledged both Canadian carriers have a strong incentive to project optimism given their dependence on cross-border traffic.

CN and CPKC are meanwhile working to diversify trade flows by routing more cargo through West Coast ports and developing Canada-Mexico land-bridge corridors. UP’s merger agreement with CN, reached last week, was cited