Railroads and rail shippers already wary of the pending merger between Union Pacific and Norfolk Southern have expressed significant concern after UP CEO Jim Vena said he would raise rates on shippers who oppose the tie-up in a video made public this week.
In the video captured in March during a presentation at a conference of the a Southwest Association of Rail Shippers, Vena is shown saying “I'll probably increase everybody's rates that said they didn't want a seamless railroad by three or four extra percent to teach you a lesson.”
The comments came at the end of Vena’s speech outlining the benefits of the proposed merger, during which he also said the railroad was willing to make deals with customers and to discuss shipper concerns to move the deal forward.
UP published the video on its website this week after the Surface Transportation Board ordered the railroad to “redesignate the relevant video as public and to submit additional documents and information related to allegations of retaliation,” according to a Nov. 4 decision from the agency.
The decision came after CPKC urged the agency to consider terminating the proposed merger in an Oct. 30 filing, where it also highlighted its call to make the video public.
The Joint Shipper Associations also filed a comment related to Vena’s remarks and expressed support for CPKC’s appeal, per a Nov. 2 filing. The group previously said the remarks made by Vena threatened “retaliation against opposing shippers” and that Union Pacific’s subsequent behavior would “serve to chill shipper voices,” per an Oct. 13 filing.
In response to industry pressure, Union Pacific has stated that it does not retaliate against customers and that a customer’s position on the merger doesn’t determine rates or service quality.
“We are deeply disappointed that anyone in our industry would draw a connection between an offhand comment at an industry conference to a bomb threat in an airport. That comparison crosses a line and we strongly disagree. Personal emotions need to be put aside so we can focus on the facts,” UP said in a statement.
The now public video will be part of the documents and proceedings with the STB as the proposed merger continues to be under review.
“The message is clear: the proceeding must remain transparent, and the public record cannot be displaced by private understandings,” Senior Consultant Steve Blinn at PLG Consulting said in a LinkedIn post.
