Union Pacific and Norfolk Southern plan a $72 billion merger to form the first US transcontinental freight railroad, according to Bloomberg. The deal, which still needs regulatory approval, could reshape the rail industry and spark further consolidation. Supporters cite efficiency gains, while critics warn of service issues and higher costs based on past mergers. They write:
Two of the largest US railroads, Union Pacific and Norfolk Southern, announced on Tuesday a plan to combine in a $72 billion deal that would create America’s first transcontinental freight railroad.
The stock and cash deal would be the largest ever in a sector that has already massively consolidated in recent decades. […]
US freight railroads are crucial to America’s economy, carrying about 30% of the nation’s freight in terms of weight, according to the Bureau of Transportation Statistics. Trains transport autos, retail goods, food and energy products, as well as raw materials and parts needed to run America’s factories. […]
Swan said the while there could be some increased efficiency moving traffic cross-country, such as from the Port of Los Angeles to customers on the East Coast, trains will still need to stop and remove the cargo for different destinations.
“There’s not that many containers that move all the way from one coast to the other,” he said.
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