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The fate of the proposed merger under which Norfolk Southern Railroad would be acquired by Union Pacific Railroad, creating America's first transcontinental rail freight carrier, is beginning to undergo scrutiny by the U.S. Surface Transportation Board under what is being touted as a tough new standard.
Therefore, the review, now just beginning, will not only decide whether the proposed merger would be in customers' best interests; it also will deliver a verdict on the correctness and effectiveness of the new standard itself.
For communities like Altoona that have a stake in Norfolk Southern's well-being, it is imperative that Surface Transportation does its work flawlessly, based on actual facts and needs and to ensure proper service, rather than cave to self-serving preferences emanating from entities such as Wall Street, politics or other special interests.
The right message: Keep greedy, self-serving pressures out of the review process and make a promise to that effect known now, just as the review is ramping up.
In Altoona's view, nothing less should be considered acceptable. The Mountain City's ongoing role in the railroad industry could suffer, if that role is ignored as the merger study proceeds.
No honest "tough new standard" would allow birth of such an unacceptable situation, and Pennsylvania's representatives in Congress have a duty to pay attention to what will be transpiring on the merger front.
Regarding the new standard for reviews, that current - albeit untested - set of rules, procedures and points of attention is the result of railroad mergers, now described as disastrous, that took place in the 1990s. Those 1990s mergers led to weeks-long -- even months-long -- shipment delays that must be avoided, going forward.
"These untested rules require any merger of the six largest railroads to be in the public interest and show that it will enhance competition" is a quote from an Associated Press article published in the Mirror's July 24 edition.
"When the Surface Transportation Board approved the first major rail merger in more than two decades three years ago," the article continues, "it used a less stringent standard allowing Canadian Pacific's $31 billion acquisition of Kansas City Southern."
It is to be hoped that the Transportation Board will carry forth any benefits of that experience as it transitions into the purported tougher review scenario that it will be using in regard to Union Pacific-Norfolk Southern, listed as an $85 billion transaction.
Opposition to the merger has surfaced, and none of the arguments put forth by opponents should be ignored.
Probably the main opposing argument, as the July 24 article reported, is that the merger would concentrate so much market power in the hands of one company that would control more than 40% of all rail traffic and reduce the number of major freight railroads in the United States down to five.
One of the opponents -- CSX -- has voiced concerns over how the proposed merger, if approved, would affect the competitive balance in the industry.
But Union Pacific, having gained backing for the move from Canadian National Railroad, has made success of the merger plan seem more likely, although not the proverbial slam dunk.
The Surface Transportation Board, in its review, must ascertain Union Pacific claims that agreements with Canadian National will address many of the competitive concerns that opponents have presented.
Union Pacific CEO Jim Vena is optimistic that the merger will be approved, but the need for beefed-up attention by Altoona and everyone dedicated to this community's best interests cannot be minimized.