Say No To Western Rail Merger
This Wednesday, Jim Cramer, CNBC’s lively stock guru, mentioned that his favorite potential merger deal is one between BNSF and Union Pacific railways.
Please, no.
It’s not the anti-competitive issues we worry about. Not that those huge potential problems don’t exist. Between them, BNSF and UP control nearly every major rail line west of the Mississippi.
No, it’s the impact this merger would have on Amtrak that concerns us. A viable Amtrak keeps airfares lower on competing routes.
On the tracks of most railroads, Amtrak tends to run reasonably on time or nearly so.
But when it uses rails controlled by Union Pacific, Amtrak routinely arrives 5 or 10 hours behind schedule and even later.
Amtrak has tried to work with Union Pacific. It has padded its schedules and changed its departure times, but nothing seems to overcome what appears from press reports to be gross operational mismanagement.
Union Pacific cites freight congestion for the delays, and it’s true that UP like other U.S. railroads faces unprecedented volumes of freight.
However, BNSF, which shares fully in the growth of western freight traffic, handles its Amtrak trains well. Routine long delays that ruin Amtrak’s public image and provide fodder for Jay Leno are not a problem on BNSF.
Where there’s a will there’s a way.
In fairness, UP’s current operators must deal with chronic underinvestment in railway infrastructure by previous corporate managements, which perhaps allowed these to show better short-term financial results.
But, current UP management cannot claim innocence—not at all.
Although Amtrak’s contracts with Union Pacific specifically give passenger trains preference over freight trains, both Amtrak passengers and the press report that this has obviously not been happening. This has not been happening for many years.
Until these problems at UP are resolved, please support no merger that combines BNSF and Union Pacific corporate officers.