A trade group representing port terminal operators told the Surface Transportation Board (STB) that approving the merger of Union Pacific (UP) and Norfolk Southern (NS) could negatively impact some of the intermodal shipping communities that sustain the nation’s supply chain and regional economies throughout the nation.

The National Association of Waterfront Employers (NAWE) asked STB in a letter on 1 December to only consider the proposed merger after rigorous review that takes into account perspectives that will help the next generation of the rail network grow and effectively serve the nation’s intermodal shipping system.

If approved, the combined UP-NS system would control nearly 45% of all US rail tonnage and hold dominant market share in critical commodity sectors including chemicals, metals, lumber, motor vehicles and equipment, crushed stone, sand and gravel, food and kindred products, and iron and steel scrap.

In its opposition to the merger, NAWE said that continued concentration of intermodal rail service could negatively impact local and regional trade if rail carriers prioritize services that meet their own needs while disregarding opportunities to serve other regional port areas.

“Intermodal rail expansion is and will be critical to support port and terminal development on a regional basis and will impact a huge percentage of the businesses operating through the marine terminal system,” Carl Bentzel, NAWE president, said in the letter. “We are greatly concerned as to whether a reduction of two of the four major remaining competitors offering intermodal rail service will serve to benefit our industry.”

The letter explained that NAWE member companies handle more than 90% of the nation’s import and export containerized trade, much of the nation’s breakbulk and automobiles, and manage the loading and unloading of almost all cruise ship operations.

“Our industry is the hub that connects international trade to the nation’s interior and may represent the most critical component in sustaining the nation’s supply chain,” Bentzel said.

The letter said that while each port and terminal location operates differently, the scope and efficiency of inland intermodal service are largely determined by the extent and quality of intermodal rail service provided.

“For instance, the market for intermodal shipping service into Chicago, which in turn acts as a hub shipment for much of the nation’s interior cargo, is serviced in large part through the ports of Los Angeles and Long Beach where over 60% of import cargo is serviced by intermodal rail,” Bentzel said. “These ports, and the terminals that operate in the port, are market dominant precisely because of the levels of intermodal rail.”

NAWE said the concern that an intermodal rail service provider could adversely reduce the competitive market of intermodal rail shipment is exacerbated when considering the current STB regulatory authority.

The statutory provisions of the Interstate Commerce Act provide explicit authority for the STB to intervene to protect port interests, NAWE said.

“However, since the late 1980s, the STB has exempted rail operations associated with trailer-on-flatcar/container-on-flatcar services,” Bentzel said. “As a result, rail intermodal services are not subject to many of the railroad economic regulatory protections afforded under 49 USC Subtitle IV. The competitive market for rail intermodal services has drastically been curtailed since that time, and the proposed merger of UP-NS could cause reduction to solely two trans-continental services.”

The letter said marine terminals need an intermodal rail service to handle increasing volumes of trade to provide streamlined imports and exports from increasingly strained port complexes.

“We need intermodal railroad services that expand the reach and capacity of medium-sized ports, so they grow, but more fundamentally, we need to build a stronger business partnership with the railroads,” Bentzel said.

UP-NS MERGER BENEFITS

UP CEO Jim Vena and NS president and CEO Mark George said when making the announcement that the merger will improve single-line service, address underserved areas like the Ohio Valley and the Mississippi River watershed, and enhance competition.

Customers of the combined railroad will benefit from faster transit times, increased reliability and improved customer asset utilization, the executives said.

In the US, chemical rail car loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest.

Chemicals are generally shipped in tank cars (liquids and liquefied gases), hopper cars (dry commodities); and some boxcars (dry bulk or packaged chemical products).
Source: ICIS (https://www.icis.com/explore/resources/news/2025/12/04/11161730/up-ns-rail-merger-could-have-negative-impact-on-smaller-developing-ports-trade-group/)