The backbone of the American economy relies heavily on chemistry. From the medicines we consume to the vehicles we use, it’s an essential part of our daily lives. However, efficient freight rail systems are crucial for this chemistry to function effectively. Unfortunately, this vital system is currently at risk due to a proposed merger that could create a dominating coast-to-coast rail monopoly.
This situation has serious implications. The U.S. ranks just behind China in chemical production, and there’s a strong desire to take the lead. Gaining access to reliable and competitive freight rail is vital for achieving this goal. If we can’t transport domestically manufactured chemicals effectively, we may struggle to revitalize manufacturing, strengthen supply chains, and maintain our competitive edge globally.
Union Pacific and Norfolk Southern are set to merge, forming a significant transcontinental railroad network. If this merger is allowed, one company could control nearly half of U.S. cargo movements and a majority of chemical shipments. This isn’t competition; it’s more like a monopoly on steroids. History teaches us what could follow: service disruptions, inflated costs, and, inevitably, American manufacturers bearing the brunt of it.
This isn’t new territory. The merger of Union Pacific and Southern Pacific in 1996 promised increased efficiency but instead caused extensive disruptions and billions in losses. More recently, the partnership between Canadian Pacific and Kansas City saw on-time delivery rates plummet to a mere 26%. Each time railroads consolidate, choices dwindle, expenses rise, and supply chains weaken.
Vice President JD Vance has succinctly illustrated the issue at a recent event, stating, “When one or two companies control an entire sector, that’s bad for freedom and bad for prosperity.” He’s absolutely right. This is why all Americans need to be cautious about the potential for a UP-NS Railroad monopoly and its possible repercussions on prices. Monopolies can undermine both freedom and economic health, and they are especially harmful to the economy itself.
But this situation isn’t exclusively about railroads. It pertains to broader themes of freedom, fairness, and America’s competitiveness. A monopoly in the railroad sector doesn’t just pressure chemical producers; it impacts farmers, energy providers, manufacturers, and, in the end, consumers as well.
This development could also contradict the America First policy that President Trump championed. U.S. manufacturers depending on rail services would face increased costs and diminished options, thereby empowering foreign competitors.
Compounding the issue, the merger claims to facilitate intermodal container shipping, mainly for imports from countries like China. This would hand foreign producers an advantage over American-made goods, endangering U.S. jobs.
The Land Transport Board (STB) is the only entity with the authority to analyze this merger and should ensure it upholds competition rather than diminishes it. According to their own guidelines, mergers should preserve, if not enhance, competition. To date, the proposal hasn’t clarified how it meets those criteria or even why it is necessary. Other railroads have successfully improved service through collaborations without stifling competition. If Union Pacific and Norfolk Southern can’t demonstrate that this merger will foster competition, it should be denied.
Currently, Americans are deeply concerned about living costs and inflation. A merger of this magnitude could exacerbate inflation and further complicate the primary issue for voters. It’s essential for policymakers to heed these concerns and repeal agreements that create monopolies likely to drive up prices.
America deserves a better solution—one that fortifies supply chains, reduces costs, and prioritizes American industries, rather than a merger that entrenches monopoly power for years to come.
Even though UP-NS may wish to celebrate this deal as a win for shareholders, really, it wouldn’t be a success. There’s a growing consensus among Democrats, Republicans, as well as rail companies, labor unions, farmers, and manufacturers, all urging the administration to reconsider.
The path forward is clear: we can defend the integrity of American manufacturing or we can risk repeating past mistakes by allowing a railroad monopoly to emerge.
