BNSF Railway CEO Katie Farmer Statement on Proposed UP-NS Merger

FORT WORTH, Texas--(BUSINESS WIRE)--At the Baird 55^th Annual Conference Tuesday in Chicago, Union Pacific, Corp. made comments indicating that over 300 intermodal lanes will not be closed where there is an origin or destination currently on BNSF and Norfolk Southern or Union Pacific and CSX if the merger is approved.

“I’m sure the nation’s rail customers are relieved that UP is committing to keep all current intermodal lanes open if their merger with NS is approved,” said Katie Farmer, president and CEO, BNSF Railway. “UP highlighted in prior rail industry mergers that the new merged railroad usually raises rates on competing interchange partners to the point of making those lanes economically uncompetitive.”

Yesterday’s announcement is consistent with Union Pacific’s position during the last major merger between Canadian Pacific and Kansas City Southern where Union Pacific’s filings at the Surface Transportation Board made the following arguments opposing the merger of the two smallest Class I railroads:

“If the Board does authorize the transaction, shippers should not have to rely on CPKC’s ‘good faith.’ The Board should impose conditions to prevent the reduction of competitive options at gateways, particularly the Laredo Gateway.” UP Comments and Request for Conditions, Canadian Pacific Railway—Control—Kansas City Southern, FD Docket No. 36500, at 9.

“In short, Applicants would face enormous post-merger pressure to divert traffic from existing KCSM interline service to CPKC single-line service using strategies that reduce shippers’ existing competitive options. As explained below, CPKC would have the ability to implement such anticompetitive strategies by raising rates shippers must pay for interline service or degrading the quality of service shippers receive when using interline service.” Id. at 26.

About BNSF Railway

BNSF Railway is one of North America’s leading freight transportation companies. BNSF operates approximately 32,500 route miles of track in 28 states and three Canadian provinces. BNSF is one of the top transporters of consumer goods, grain and agricultural products, low-sulfur coal, and industrial goods such as petroleum, chemicals, housing materials, food, and beverages. BNSF’s shipments help feed, clothe, supply, and power American homes and businesses every day. BNSF and its employees have developed one of the most technologically advanced, and efficient railroads in the industry. We work continuously to improve the value of the safety, service, energy, and environmental benefits we provide to our customers and the communities we serve. You can learn more about BNSF at www.BNSF.com.