AUDIO: Danny Munch with the American Farm Bureau Federation comments on the proposed Union Pacific -Norfolk Southern railroad merger with Brownfield’s Larry Lee.
A farm organization is opposing the planned merger between the Union Pacific and Norfolk and Southern railroads because of rural service and cost concerns.
American Farm Bureau Federation economist Danny Munch says, “The decisions that are made by the companies are going to be in repsponse to profitability metrics.”
Munch tells Brownfield they are also concerned about service reliability issues, accountability, and market access for farmers. “We’ve seen in previous mergers service integration issues, most recently with the Canadian Pacific and Kansas City Southern system integration. We saw the number of cars held over twenty-four hours spike subtantially when their computer systems were merged. That causes a bunch of delays within the broader railway system.”
Munch says the 1996 Union Pacific & Southern Pacific merger had operational failures that led to months of service disruptions in America’s west and south. “Grain shipments were stalled, feed deliveries were delayed, and Congressional inquiries estimated the broader economic impact of four billion dollars from when that merger took place.”
Munch says rail service disruptions a couple of years ago created feed delivery problems for livestock, and producers can’t afford another similar problem. *He says farmers also face more transportation costs and delays if weather or other events prompt railroads to prioritize higher-value traffic like oil.
The proposed merger is also opposed by many labor unions, the Alliance for Chemical Distribution, and competitor BNSF Railway.
