MOBILE, Ala. – The Alabama Port Authority has entered the federal review of the proposed Union Pacific-Norfolk Southern merger, saying an initial assessment has raised concerns about potential effects on Alabama businesses and industries that depend on freight rail.
The Port Authority filed a notice of intent Sept. 8 with the Surface Transportation Board, preserving its ability to participate as a party of record as the federal agency considers the proposed consolidation.
The filing does not constitute the Port Authority’s final position on the merger. The agency said its initial review indicates the transaction, as currently proposed, could harm Alabama’s economic interests and rail-dependent industries. It plans to consult railroad partners, businesses and other stakeholders before submitting more detailed comments.
“Our customers, including some of Alabama’s largest industries, depend on rail connections to reach domestic and global markets,” Alabama Port Authority Director and CEO Doug Otto said.
Otto said the authority has concerns that further railroad consolidation could reduce competition, increase the potential for supply-chain disruptions and expose businesses to higher transportation costs. Those concerns reflect the Port Authority’s assessment and have not been findings by federal regulators.
Union Pacific and Norfolk Southern filed a revised merger application April 30. The Surface Transportation Board accepted it for consideration May 28 and, after requiring additional information, established a procedural schedule in August to begin evaluating the merits of the transaction. The board has not decided whether to approve the merger.
If approved, Union Pacific would acquire control of Norfolk Southern and combine the two rail operations into a single system operating under the Union Pacific name. The resulting network would span about 50,000 miles across 43 states.
Alabama is among the states where the proposed transaction could produce operational changes significant enough to be examined as part of the board’s environmental review. The companies have also proposed merger-related infrastructure improvements in Alabama.
The Surface Transportation Board has set Nov. 18 as the deadline for comments on the revised merger application, including opposition, proposed conditions and other arguments concerning the transaction.