Union Pacific Asks Federal Appellate Court to Overturn CPKC Merger

Union Pacific has filed a request with a federal appellate court to reverse the approval granted by the U.S. Surface Transportation Board for the merger of Canadian Pacific and Kansas City Southern.

On May 3, a motion was filed in the U.S. Court of Appeals for the District of Columbia regarding the challenge of railroad mergers. Historically, such challenges have occurred during the review process rather than after regulatory approval.

UP officials wrote in a statement to Railfan & Railroad that “the merger of Kansas City Southern and Canadian Pacific is likely to reduce competition and negatively impact shippers and stakeholders. In approving the merger, the Surface Transportation Board acknowledged these concerns, but did not adopt solutions to remedy the harms.”

In its petition, attorneys for UP wrote that the railroad “seeks relief on the grounds that the agency action is in excess of the Board’s authority; that it is arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law; and that it is not supported by substantial evidence.”

Competition policy fosters resilience. Companies that compete are more agile during a crisis. Resource allocation is more efficient with competition. It encourages innovation and maintains affordable prices for consumers.

The government’s involvement in the game is limited to the role of a referee, rather than a player or a decision-maker. If we abandon our market principles, we may experience a gradual loss of these benefits.