BNSF Railway has stated that the proposed acquisition of Norfolk Southern by Union Pacific would weaken railroad industry competition, drive up freight rates, reduce services, and potentially cause operational disruptions.

On Tuesday, BNSF released a position paper regarding the UP-NS merger proposal and encouraged customers to express their concerns to the Surface Transportation Board (STB) — the regulatory body that will review this acquisition proposal, which could create America's first transcontinental railroad.

"No customer wants UP and NS to merge. This deal is driven by Wall Street, backed by promises of high dividend payouts to shareholders," BNSF stated. "BNSF believes there is no need for mergers to solve current issues — we can deliver immediate benefits to customers while maintaining industry competition."

BNSF argues that shippers will bear the costs of this $85 billion transaction since UP's proposed "10% traffic growth" target is unachievable. Under these circumstances, BNSF claims UP would instead maintain operations by raising rates on "captive shipping business" and drastically cutting costs.

"Union Pacific will continue its long-standing practice of sacrificing small customers, communities, and short-line railroads, leveraging its now-stronger market dominance to charge higher rates to 'captive customers' who depend on their services, while prioritizing high-density routes and closing low-volume lines," BNSF noted.

BNSF claims that if the merger is approved, UP would shut down 300 intermodal routes. This assertion is based on the potential termination of all current intermodal partnerships between UP and CSX, as well as between BNSF and Norfolk Southern.

UP and NS have indicated they will submit their merger application between October 29 and January 29, and will not release specific operational plans before then. Over the past four years, UP has built four new intermodal hubs and added domestic and international transportation services, with company executives clearly stating they view intermodal business as a growth engine.

BNSF points out that major Class I railroad mergers (as well as smaller acquisitions, such as Canadian Pacific's 2023 acquisition of Kansas City Southern) have historically caused integration-related service issues.

"The U.S. supply chain already faced severe challenges during the pandemic, and the potential impact of this proposed merger on supply chains, the economy, and consumers poses too high a risk," BNSF stated.

BNSF also expressed concerns about whether the STB can implement "practical regulatory conditions" to protect shippers' competitive choices.

"In UP's 1996 acquisition of Southern Pacific, the STB repeatedly ordered UP to fulfill merger obligations and allowed BNSF access to their lines, more than a dozen times," BNSF said, referring to conditions the STB set for approving that merger.

BNSF believes the appropriate competitive response to the UP-NS merger should be "cross-line collaboration" rather than merging with CSX. "We should not be viewed as the solution to 'correct the competitive imbalance that UP and NS are trying to create,'" BNSF emphasized.

Instead, BNSF stated that supply chains need enhanced cooperation between railroad companies — such as the cross-line intermodal service that BNSF and CSX announced in August.

"This type of collaboration provides customers with more (not fewer) options while maintaining industry competition and operational flexibility. And we can implement these collaborations now, without waiting two years — after going through lengthy and expensive regulatory processes," BNSF said.

BNSF Chief Marketing Officer Tom Williams urged customers to voice their concerns to the STB.

"The STB cannot assess the full impact of this merger in a vacuum — they need to hear directly from stakeholders like you," he wrote in a notice to customers on Monday. "Your feedback will help the board clearly understand the actual impact of the merger on shippers, the industry, and communities."

UP and NS maintain that their transcontinental merger would enhance industry competition, drive economic growth, help import-export companies access global markets, and support American manufacturing revitalization.

The two companies claim that providing "single-line direct service" would drive traffic growth, particularly in the "watershed region" within hundreds of miles around the Mississippi River — an area that has long been a "vacuum zone" between Eastern and Western U.S. rail networks due to complex rail interchanges and short transport distances.

UP and NS also expressed confidence that the "end-to-end merger will drive traffic growth," therefore committing that the merger would not result in job losses for any union members.

"Union Pacific is disappointed by BNSF's approach. As a subsidiary of Berkshire Hathaway (a publicly traded company), BNSF is disseminating false information. For example, their claim that Union Pacific plans to close 300 intermodal routes is completely baseless and entirely false," Union Pacific spokesperson Kristen South stated in an email.

She noted that over 100 shippers have already written letters supporting the merger, with more than 100 additional support letters in preparation.

Meanwhile, hundreds of shippers representing manufacturing, agriculture, and energy industries have publicly expressed opposition to the merger proposal.