Conservatives and free-market advocates are heartily backing a proposed merger between the Union Pacific and Norfolk Southern railroads, saying the blockbuster freight deal would fuel President Trump’s bid for a “new industrial era.”
Over two dozen organizations, from Americans for Tax Reform to the President Theodore Roosevelt-inspired Bull Moose Project, told the Surface Transportation Board to approve the deal “without delay.” They pointed to Canada’s transcontinental railroad and China’s “Belt and Road” initiative to dominate international logistics.
“If America fails to act, we risk falling behind,” the groups wrote in a joint letter to the board. “Approving this merger ensures that American goods are moved on American rails by American workers, ultimately strengthening our economy while protecting our national interests.”
Mr. Trump is pushing an agenda of tax cuts, deregulation and tariffs on imports in pursuit of a “golden age” of homegrown manufacturing.
Job growth remains sluggish. Retailers have warned of price hikes as a tradeoff for protecting domestic industries through tariffs.
Yet Mr. Trump can boast of big-ticket investments by tech, automobile and pharmaceutical companies in the U.S., and tariffs are reaping billions of dollars for the Treasury.
The gross domestic product also grew robustly in the second quarter.
To build on that, the country must “match new industrial growth with the infrastructure capable of supporting it,” the groups said in support of the merger.
“By linking two of the nation’s largest rail networks into a unified transcontinental system, this merger would unlock faster, more reliable, and more affordable movement of goods across the United States,” they said.
Union Pacific Corporation and Norfolk Southern Corporation announced their plan in July to connect 50,000 route miles of railroad and 100 ports across 43 states from coast to coast, creating a transcontinental railroad.
Under the deal, Union Pacific would acquire Norfolk Southern in a stock and cash transaction.
The railroads said freight rail moves about 1.5 billion tons of material and goods every year, and that a transcontinental merger would help them compete with Canadian railroads “to win back U.S. freight volume and American jobs.”
The companies are submitting a formal application to the STB that describes the potential benefits of a merger. The review process is expected to take 19 to 22 months, with the railroads hoping to complete the transaction by early 2027.
Supporters say the merger would reduce bottlenecks where freight rail is delayed by handoffs between carriers in major cities, “reducing waste and speeding up deliveries.”
“A streamlined coast-to-coast rail system will also help reduce the cost of consumer goods transported frequently by rail, ultimately lowering costs for American consumers and families,” the letter said.
The Transport Workers Union of America, a key labor union, opposes the proposed merger. The union says the deal might be good for Wall Street, but it doesn’t trust the companies to maintain strong safety and hiring standards.
“We expect the Surface Transportation Board, Federal Railroad Administration, key lawmakers, other railroads, and shippers to stand with organized labor and oppose this deal,” said TWU Rail Division Director John Feltz.
SMART Transportation Division (SMART-TD), the largest rail labor organization in the U.S., said it has “every intention to oppose this merger when it comes before the Surface Transportation Board for approval.”
BNSF Railway said collaboration among railways is a good thing. But it argued the planned merger would “concentrate too much control of the nation’s freight market with one railroad.”
Canadian Pacific also pushed back on further consolidation of the industry.
Merger supporters said Canadian opposition is not surprising.
“They know that a stronger American system means less freight flowing through foreign-controlled channels,” the groups wrote in the new letter. “But the Surface Transportation Board’s responsibility is to the United States and its people, not to foreign corporations seeking to protect their market share.”
The Washington Times reached out to the Surface Transportation Board for comment on the status of its review. However, the agency is not monitoring media requests due to the federal government shutdown.
Proponents of the deal who signed the letter also include CASE (Consumer Actions for a Strong Economy), Andrew Langer of the Institute for Liberty, the Taxpayers Protection Alliance and the American Consumer Institute, among others.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.