Seven state attorneys general urge STB to reject Union Pacific and Norfolk Southern merger

Seven state attorneys general have jointly urged the Surface Transportation Board (STB) to reject a revised merger application from Union Pacific Railroad Company and Norfolk Southern Railway, citing concerns over potential increased costs for farmers, shippers, and consumers due to reduced competition in the freight rail industry.

In a letter to the STB, the attorneys general from Montana, Iowa, Kansas, Florida, North Dakota, South Dakota, and Tennessee argued that the merger application, despite recent amendments, fails to establish a clear public interest case. They emphasized the critical role that rail competition plays in ensuring affordable and efficient transportation for farmers and local businesses.

“Railroads wield significant market power over farmers and local businesses that rely on rail to move their products to market,” said a statement from the attorneys general. “At a time when railroads are prospering financially, there is no reason to create a behemoth railroad that will take more money from farmers, shippers, and ultimately consumers in our states and across the country.”

The attorneys general further highlighted the historical precedent of such mergers, warning that they often result in fewer routing options, higher captive freight costs, and severe supply chain disruptions. They stressed that safe, efficient, and cost-effective shipping is essential for various sectors, including agriculture, mining, forestry, and manufacturing.

These concerns mirror ongoing litigation filed by 13 Kansas- and Colorado-based farmers and Soloviev Group subsidiaries Weskan Grain and Colorado Pacific Railroad. The lawsuit, filed in the U.S. District Court for the District of Kansas under Docket No. 2:26-cv-02053, accuses Union Pacific Railroad Company and Kansas & Oklahoma Railroad, LLC of engaging in conduct designed to stifle competition from a newly rehabilitated rail line and preserve control over westward shipments of grain.

The case is being represented by Ajamie LLP and Sharp Law LLP, emphasizing the plaintiffs' commitment to defending competition and market access for farmers.

“Competitive rail is the backbone of the global competitiveness of the American economy,” the attorneys general wrote in their letter. “We are concerned that this merger will have the opposite effect, creating a less competitive and more expensive transportation system for all.”

The letter’s authors believe that maintaining a competitive rail environment is crucial for the economic health of rural America and the broader economy. They are urging the STB to carefully evaluate the proposed merger and consider the potential negative impacts on farmers and consumers.

In their letter, the attorneys general also noted the historical precedent of reduced competition leading to higher costs and fewer options for rail users. They warned that the proposed merger could exacerbate these issues, particularly in regions heavily reliant on rail for transportation.

The ongoing legal and regulatory challenges reflect the broader debate surrounding railroad mergers and their implications for the agricultural sector and overall economic competitiveness. As the STB reviews the application, the case highlights the ongoing tension between corporate consolidation and the public interest in affordable and accessible transportation.