NITL Weighs in on Rail Mergers

Why It Matters

If approved, the UP‑NS merger could deepen shippers’ dependence on a single railroad, driving up costs and reducing service reliability, while eroding a key competitive lever in U.S. freight logistics.

Key Takeaways

• NITL opposes UP-NS merger, citing reduced competition
• Captive shippers face higher rates and unreliable service
• NITL urges STB to deny merger without clear competition benefits
• Coalition seeks to preserve reciprocal switching rules under Part 1144

Pulse Analysis

Rail consolidation has accelerated over the past two decades, with the Union Pacific‑Norfolk Southern deal representing the latest attempt to create a near‑duopoly in Class I freight. Proponents argue that scale can yield operational efficiencies and lower capital costs, yet shippers increasingly report that larger, merged railroads prioritize high‑margin lanes and reduce service frequency on less profitable routes. This dynamic leaves many manufacturers, agricultural processors, and distributors with limited alternatives, effectively turning them into captive customers whose bargaining power erodes.

For the shipping community, the stakes are tangible. NITL’s members collectively spend billions annually on freight rail, and any price increase directly impacts product margins and end‑consumer costs. The association points to a pattern where past mergers have led to higher tariffs, longer transit times, and more frequent service disruptions. By demanding that the Surface Transportation Board (STB) require a transparent, data‑driven justification for the merger’s purported benefits, NITL seeks to safeguard rail‑to‑rail competition—a critical counterbalance to trucking that can keep rates competitive and service reliable.

Regulatory nuance adds another layer of complexity. Part 1144 of the Code of Federal Regulations governs reciprocal switching, allowing shippers stuck on a single line to request access to a competitor’s tracks. NITL and its Stop the Rail Merger Coalition argue that repealing or weakening this rule would eliminate a vital mechanism for price and service competition. Preserving reciprocal switching could force larger railroads to maintain higher service standards, benefiting the broader U.S. economy by supporting manufacturers, farmers, and distributors who rely on dependable, cost‑effective freight movement.