Clock Starts On New UPNS Application

by Jim Mathews / President & CEO

Union Pacific and Norfolk Southern told the Surface Transportation Board this week that they expect to re-file their merger application, and that they’ll do so by April 30. The STB last month unanimously rejected the railroads’ first application as incomplete.

For your Rail Passengers Association staff, that act officially starts the clock. By statute, we’ll have 45 days to file any responsive comments to that re-filed application, so by mid-June we’ll have to be on the record making sure the passenger’s voice gets counted as the Board considers the ramifications of the largest railroad merger in the history of the U.S.

Even though we won’t know all of those potential ramifications until the new application is filed, we know the map won’t change, the combination won’t change, and the scale and scope of this transaction will create a behemoth Class I railroad that will give a single private company, which is mostly unaccountable to the public, an effective veto over any expansion or growth in America’s passenger rail service.

That’s why your Association staff has already been hard at work examining each route that might be hurt, looking for conflicts and asking questions about mitigations.

In its decision rejecting the original application, STB noted that while the application “attempts to include” all potentially affected commuter and passenger services hosted by UP and NS, even those where -- for now at least -- the railroads aren’t contemplating adding any more freight trains, “the Application appears to omit entirely several services hosted by UP and NS, and fails to address impacts on some other services. Applicants shall provide an impact analysis and Service Assurance Plan details for the omitted passenger and commuter services or explain otherwise why they are not needed.”

The message was clear: ‘show your work.’ We intend to scrutinize those re-filed documents very closely, and we’ve pulled together a team of a dozen Association experts, along with some outside allies, to build the framework we’ll need to dive into that new application right away.

Even before we see the new documents, however, we know a few things. We know the combined UPNS will host 57 percent of Amtrak's state-supported and long-distance routes. We know the combined UPNS will carry at least 63 percent of all Amtrak state-supported and long-distance ridership. And we also know that nearly half of the 69 routes selected by the Federal Railroad Administration to be part of the Corridor Identification Program travel or would travel over combined UPNS rights-of-way. Think about the implications for future Corridor ID awards alone!

Throughout its original filing, Union Pacific repeatedly asserts that the merger will allow additional freight trains to operate while maintaining current passenger service levels. That phrase appears again and again, applied to dozens of Amtrak routes and commuter services nationwide. We would expect UP and NS to repeat that strikingly modest claim in its re-filed application.

Yes, that’s responsive to the regulatory requirement that merger applicants file a Service Assurance Plan describing “definitively” how railroads would “continue to facilitate Amtrak or commuter services...so as to fulfill existing performance agreements” (you can read the entire regulatory section on Service Assurance Plans by clicking here: 49 C.F.R. § 1180.10). But a merger application like this, open to public scrutiny, is as much a sales pitch as it is a legal document, and UP and NS need to use their filing to convince the STB Members -- who are the public’s stand-ins as they consider the public benefits, and potential harms, of the transaction -- that this merger is a good deal not just for the companies and their executives but for the public at large.

And that’s a big problem. Because maintaining today’s service is not the same as enabling growth. As reflected in the Bipartisan Infrastructure Law, the Corridor ID Program, and many years of congressional direction, Federal rail policy aims to expand frequencies, improve reliability, and connect more communities. By contrast, the merger application largely frames success as avoiding degradation of existing service, not improving it.

So we’re getting down to work, going through the documents, reaching out and collaborating with allies well beyond passenger rail, building maps, analyzing schedules, and framing our questions in time for a filing no later than Memorial Day. We think a transaction this big, this consequential, this important for shaping -- re-shaping, really -- the entire U.S. railroad landscape for decades to come, deserves more than just a cursory critique of conglomeration, or a vague assertion of potential harms from monopoly power. We’re digging in...and if you have thoughts, we’d love to hear them.