If Partnerships Can Deliver the Benefits, Why Is a Merger Necessary?

Dear BNSF Customers,

Wednesday's announcement from Union Pacific and Canadian National provides a new data point in evaluating the proposed UP-NS merger. While the details of how their new agreements work have not yet been disclosed, it is clear from what we do know that the deal does not change the key competitive concerns that customers have raised since the merger was proposed.

In fact, the announcement underscores a point BNSF and many other stakeholders have raised throughout this proceeding: a harmful merger is not required to have railroads work together on new service offerings. For more than a year, UP has argued that partnerships among railroads cannot deliver the types of service, capacity and market access improvements it attributes to the proposed merger. Its new deal with CN says the opposite, and closely resembles collaborative arrangements that Class I railroads, including BNSF, have successfully utilized for decades.

Indeed, some of these agreements appear to be moving forward regardless of whether the merger is ultimately approved. If many of the claimed benefits can and will be achieved through commercial agreements today, why is a merger necessary to deliver them?

Once the dust settles on this announcement, the fundamental concerns many customers continue to express about the merger's long-term impact on competition will still be there. These new agreements do not change the fact that the transaction would create a single railroad controlling approximately half of the nation's freight rail market and leave many customers with fewer competitive options than they have today.

Yesterday, a group of 23 Democratic U.S. senators representing approximately 90 million Americans submitted a letter to the Surface Transportation Board (STB) expressing concern about the proposed merger and urging a rigorous review of its impacts on competition, customers, workers and the broader supply chain. The senators emphasized that the transaction should not be approved unless it can meet the Board's requirement to enhance competition. Their filing is another indication that questions surrounding the merger's long-term competitive effects continue to draw attention from a broad and growing range of stakeholders.

As the STB has repeatedly emphasized throughout this proceeding, transactions of this scale warrant careful examination of their competitive effects and long-term impact on customers. This announcement reinforces the importance of that review and underscores that customer engagement remains as important as ever.

We appreciate those customers who have already made their voices heard through Notices of Intent to Participate and other submissions. As regulators continue their review, customer perspectives provide critical context on how the proposed transaction could affect competition, service reliability and future shipping options. We encourage customers to participate and help ensure the Board has a complete understanding of the potential impacts.

Thank you for your continued engagement and we will keep you informed as additional information becomes available.

Sincerely,
 
Tom G. Williams
Executive Vice President & Chief Marketing Officer