Chemical manufacturers express rail merger concerns in letter to Trump

The American Chemistry Council (ACC), whose members are major users of freight-rail service, last week sent a letter to President Trump and federal regulators asking that they carefully scrutinize the proposed $85 billion merger of Union Pacific Railroad and Norfolk Southern Railway when the Class Is' application reaches the Surface Transportation Board.

The 40 CEOs of chemical manufacturing companies who signed the letter warned that merging two of the nation's largest railroads would harm competition by resulting in a huge concentration of power. Presently, only four major railroads control 90% of U.S. freight-rail traffic. Two of the four are UP and NS.

“Fewer railroads will mean fewer transportation options, and the merger threatens to make our U.S. manufacturing sites less competitive with the rest of the world," the letter states. The letter cites major service disruptions that occurred after previous railroad mergers.

"The chemical industry is a cornerstone of American manufacturing and global trade,” said ACC President and CEO Chris Jahn in a press release. “Our facilities require dependable, competitive rail service to deliver essential materials across the country."

Specifically, the ACC and its member companies called on the STB to adhere to reject any deal that fails to substantially enhance rail-to-rail competition and improve service. The UP-NS merger will be the largest railroad merger ever to go before the STB. 

To read the ACC's letter in its entirety, click here.

Last month, Trump indicated his support for the merger a week after meeting with UP CEO Jim Vena at the White House.