Union Pacific Presents Strategic Vision and Counters Misconceptions at Midwest Association of Rail Shippers Winter Meeting
Union Pacific Corporation (NYSE: UNP) engaged directly with customers and industry stakeholders at the Midwest Association of Rail Shippers (MARS) Winter Meeting, underscoring the strategic benefits of its proposed merger with Norfolk Southern and addressing misinformation propagated by opponents of the combination. The meeting provided a platform to share the company’s vision for a modernized, coast-to-coast rail network while highlighting tangible advantages for shippers, employees, and the broader U.S. economy.
Last month, Union Pacific and Norfolk Southern submitted a detailed merger application to the Surface Transportation Board (STB) to create America’s first transcontinental railroad. The submission includes comprehensive studies and analyses from independent industry experts, illustrating how a unified, end-to-end rail network would enhance service reliability, reduce costs, and provide faster shipping solutions across the country.
The merger proposal garnered broad-based support, reflected in a record-setting 2,000 letters from customers, public officials, industry associations, and unions. These letters reinforce the market and community confidence in the potential benefits of the combined network, countering claims from detractors that the merger would harm competition or raise costs.
Addressing Concerns and Misinformation
Union Pacific emphasized that the MARS meeting was an important forum to directly address concerns and clarify facts for shippers and stakeholders.
We anticipated opposition from competitors, and that is understandable,” said Jim Vena, CEO of Union Pacific. However, this is a transformational merger that will invigorate the railroad industry, encouraging competitors to improve their services and lower prices, ultimately benefiting shippers and the economy.”
Vena continued, “While opponents focus on past trends and outdated arguments, we are taking bold steps to strengthen the U.S. supply chain. America needs strong, innovative railroads capable of supporting the growth of the economy, and this merger positions us to deliver exactly that.”
Enhancing Competition and Efficiency
A key point emphasized by Union Pacific is that the single-line transcontinental rail service will inject fresh competitive energy into the industry, particularly by providing a more cost-effective alternative to long-haul trucking. Critics have argued that merging the two railroads would reduce customer options. In reality, the merger is an end-to-end combination with minimal network overlap—Union Pacific primarily serving the western United States and Norfolk Southern operating in the east.
This complementary structure ensures that most shippers will retain access to multiple transportation options, while benefiting from the streamlined efficiency of a single-line network. More than 500 shippers submitted letters of support to the STB, demonstrating strong industry confidence in the proposal.
Cost Reduction and Operational Advantages
The merger promises significant cost advantages through the elimination of redundant handoffs, optimization of routes, and enhanced operational efficiency. Critics claim that the consolidation will drive prices upward, but these claims lack evidence. Independent analysis by Oliver Wyman shows that interline merchandise traffic moving 1,000 to 1,500 miles costs approximately 35% more than comparable single-line service, underscoring the potential for savings and improved efficiency for U.S. businesses and consumers.
By consolidating transcontinental operations under one end-to-end network, shippers can expect lower transportation costs, faster transit times, and more predictable service, creating a compelling value proposition for the combined network.
Reliability and Resilience
Another primary advantage of the proposed merger is improved service reliability. Opponents have referenced historical mergers as examples of service disruption, citing events from decades ago. Union Pacific emphasized that these arguments overlook major technological and operational advances that have transformed the railroad industry over the past 30 years.
Independent experts analyzing the proposed merger concluded that most yards, terminals, and operations will experience minimal disruption, as the majority of traffic flows on routes that do not overlap. The merger will instead streamline the handling of interline traffic, reducing opportunities for delays and improving reliability across the system.
Additionally, the merger enhances resiliency, providing more mainline track, terminals, locomotives, railcars, and crews to respond to congestion, adverse weather, or unexpected operational challenges. The combined network’s 50,000 route miles allow for rapid rerouting options to maintain consistent traffic flow.
Stimulating Growth Through Innovation
Union Pacific also highlighted the growth potential that comes from offering single-line, coast-to-coast service. Opponents suggest that previous mergers failed to produce anticipated growth, but none of those mergers created the first transcontinental, single-line rail network. The new network would also provide cost-effective rail service to historically underserved regions, driving market expansion and increasing rail adoption.
Extensive market analyses included in the nearly 7,000-page STB application provide a transparent, data-driven case for growth, cost savings, and operational improvement. The application includes detailed integration plans, operating procedures, and market projections, ensuring that regulators, stakeholders, and the public have full visibility into the merger’s anticipated outcomes.
Union Workforce Protections
Addressing concerns about the potential impact on employees, Union Pacific reaffirmed its commitment to union workforce protections. The company has pledged that every employee holding a union position at the time of merger approval will retain a secure job. This groundbreaking jobs-for-life agreement sets a new standard in labor protections within the railroad industry, demonstrating the company’s dedication to its workforce.
Vena noted, “We are proud to be the first railroad to offer these types of protections. They ensure stability for our employees while we pursue transformative changes in service delivery.”
Positive Customer Reception
Feedback from shippers at the MARS meeting reinforced the value proposition of the merger. Customers expressed enthusiasm for the operational efficiencies, cost reductions, and reliability improvements a transcontinental single-line network would provide. Vena summarized:
“We’ve had fantastic interactions with customers at the MARS meeting. Despite what competitors or lobbyists may claim in Washington, customers understand the benefits of single-line service and are excited about how a transcontinental network can improve efficiency and competitiveness.”
Strategic Implications for the U.S. Supply Chain
By creating America’s first coast-to-coast railroad, the merger is expected to enhance national supply chain efficiency, reduce dependency on long-haul trucking, and inject new competitive dynamics into the freight transport industry. The combination of Union Pacific and Norfolk Southern offers a unique opportunity to modernize rail operations, leverage technology, and improve service quality at a national scale.
The proposed merger aligns with broader trends in logistics and infrastructure investment, responding to growing demand for reliable, cost-effective freight transport across the United States. Single-line service offers predictable transit times, operational flexibility, and cost savings, all of which contribute to economic growth and stronger competitiveness for U.S. businesses.
Union Pacific’s participation in the MARS Winter Meeting underscores its commitment to transparency, customer engagement, and thoughtful leadership in the freight rail industry. By presenting factual information, addressing misconceptions, and highlighting the tangible benefits of coast-to-coast, single-line rail service, Union Pacific is reinforcing confidence in the merger with Norfolk Southern.
Through this combination, shippers can expect lower costs, faster service, greater reliability, and increased resiliency, while employees are assured strong protections and job security. With robust stakeholder support and a comprehensive, transparent plan submitted to the STB, Union Pacific and Norfolk Southern aim to deliver a modern, efficient, and competitive rail network capable of meeting the needs of a growing U.S. economy.
As Vena concluded, “We are taking bold steps to reinvigorate the railroad industry, provide unmatched service to our customers, and ensure the U.S. supply chain remains competitive for decades to come.”
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