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computegabe | 7 months ago

What's the argument for the Union Pacific and Norfolk Southern merger [1]? Any rational admin would shoot down the merger immediately as this will create a massive monopoly.

[1] https://www.reuters.com/world/us/union-pacific-talks-advance...

discuss

order

alexey-salmin|7 months ago

Perhaps a monopoly is the way for the rail, preferably state-owned.

Generally I'm heavily against both monopolies and state-controlled companies, but railways seem to be a corner-case where all the downsides and inefficiencies are outweighted by a nation-wide system that actually works.

em-bee|7 months ago

the tracks should be state-owned, just like public roads, and then train operators should pay for use. (or you could let them use it for free like roads)

that way the state can give priority to passenger rail, and prioritize maintenance and building of rails according to the needs of the people.

it also makes much smaller train operators possible and compete on the same routes.

bpodgursky|7 months ago

They share essentially zero miles of track or routes. A move only creates a monopoly if it reduces consumer choice.

No freight customer is deciding "Oh I can either ship from LA to Seattle, or Miami to DC." They are shipping from one fixed location to a different fixed location. These railroads merging does not reduce their choices or give the combined entity more leverage.

throw0101c|7 months ago

> They are shipping from one fixed location to a different fixed location. These railroads merging does not reduce their choices or give the combined entity more leverage.

If someone on the US west coast wants to ship to the US east (or vice versa) they can pit UP against BNSF, and then NS against CSX. There are a few pairs up because of the two negotiating points:

* UP-NS

* UP-CSX

* BNSF-NS

* BNSP-CSX

If the merger goes through you're now at:

* merged-UPNS

* BNSF-CSX

Do you think UPNS will give a cheaper price for a 'half-trip' and you go to their competitor the other half?

You don't think BNSF/CN/CP aren't looking at CSX right now?

liveoneggs|7 months ago

That is a big assumption on your part that east coast ports don't compete with west coast ports

lokar|7 months ago

How about monopsony?

throw0101c|7 months ago

> What's the argument for the Union Pacific and Norfolk Southern merger [1]?

'Cost savings through synergies which will be passed down to customers.'

(And certainly not shareholders and suits making more money.)

Spooky23|7 months ago

Consolidation reduces competition and increases margins. The rest of the market and the people are sacrificed at the altar of shareholder value.

Aloha|7 months ago

NS and UP do not meaningfully compete today, their networks have very little overlap.

AnimalMuppet|7 months ago

Monopoly? No. Union Pacific plus Norfolk Southern would have a monopoly on single-line end-to-end rail service in the US, true, but that's the kind of thing that you can get a "monopoly" in. BNSF and CSX interchange with each other, after all. And BNSF and CSX could (and almost certainly would) merge in response. So there's no monopoly argument.

Which doesn't mean that a rational regulator would not turn it down anyway. But rational regulators may not be running the show at the moment. UP sees that there may be an opportunity during the Trump administration. (Note "may" - nobody knows whether there is an opportunity, but there is more of a chance than there was under Biden.)