CSX, Union Pacific against final series of mergers

January 14, 2016

CHICAGO — Top executives from two of the largest railroads in the country both said yesterday that they are against any more mergers within the industry.
Union Pacific President and CEO Lance Fritz told Reuters that he didn't want to see Class I railroads merging when he was asked about Norfolk Southern and Canadian Pacific combining.

"We'll do everything in our power to make them not happen."

Fritz was addressing a group of rail shippers in Chicago on Wednesday and said that the railroad was talking with federal and state legislators, along with customers and the Surface Transportation Board about why future mergers would be bad.

He said that mergers would create problems in Chicago. When the last set of mergers happened in the 1990s, it created huge service issues.

Meanwhile, CSX Transportation Chairman and CEO Michael Ward told the Associated Press that he also doesn’t think mergers were a good idea.

"I really don't think mergers within the industry, in any form, make much sense," Ward said.

He also said there are no significant benefits to companies combining, and regulators would most likely not approve such actions without making changes that would increase costs.

Ward said that Class I railroads can expand their capacity and already have room to improve without needing to merge.

"I don't believe it's needed. I think each of the existing Class I railroads have an opportunity to create great shareholder value without a merger."