BNSF: UP+NS ‘Costly, Unnecessary, Anti-Competitive, Bad for the U.S. Economy’

Written by William C. Vantuono, Editor-in-Chief

“Integration challenges have historically caused ripple effects across the national network, even for customers not directly served by the merging railroads. When UP was challenged during the supply chain crisis, they issued more than 1,000 embargoes, causing competitive and financial harm to many customers and invited STB intervention.” – BNSF EVP and CMO Tom G. Williams. BNSF photo

Though Union Pacific and Norfolk Southern have yet to file their formal merger application with the Surface Transportation Board, kicking off a process expected to take up to 18 months, the other four Class I railroads are getting a head start exercising their vocal cords in opposition. BNSF has produced one of the strongest public responses we’ve seen thus far.

Following Warren Buffett’s pronouncement that Berkshire Hathaway, parent company of BNSF Railway, is not interested in merging with CSX (a development that contributed to CSX President and CEO Joe Hinrich’s firing), BNSF Executive Vice President and Chief Marketing Officer Tom G. Williams fired off a Sept. 29 Customer Notification urging shippers to oppose UP+NS and “tell the STB to say no to unchecked market power and the loss of competitive options that you’ll never get back.” Williams’ letter provides customers a detailed “step-by-step” guide, “Preserve Rail Competition,” on how the merger process works, and how to file comments with the STB and/or raise concerns “confidentially” with the U.S. Department of Justice, among other measures. As well, “if you would prefer not to file the letter yourself, we can file it for you,” BNSF said, proving an email link, MessageUs@BNSF.com.

Williams outlined several points in his letter:

“Impacts to your industry and facilities: Whether through reduced routing options, increased rates, or stranded investments due to service changes—your supply chain will be impacted.
“Concerns about service disruptions: Integration challenges have historically caused ripple effects across the national network, even for customers not directly served by the merging railroads. When UP was challenged during the supply chain crisis, they issued more than 1,000 embargoes, causing competitive and financial harm to many customers and invited STB intervention.
“UP’s cost-cutting model: Past reductions in headcount and elimination of key service offerings, such as unit trains for bulk commodities, have had significant impacts—particularly for agricultural and coal shippers.
“Skepticism about growth claims: UP has stated it will fund the merger through 10% volume growth, yet its last merger resulted in volume declines and increased pricing.
“Traditional remedies not sufficient to overcome competitive harms: UP leadership has publicly stated they will not offer competitive fixes, nor have they consistently honored prior merger commitments, often requiring litigation and STB intervention.”

A strongly worded position paper (download below) was attached to the letter. Among its points:

“No customer is asking for a UP-NS merger to happen. It’s driven by Wall Street on the promise of a big shareholder payout. BNSF does not believe a merger is necessary at this time, when we can deliver immediate benefits to our customers while preserving competition.
“A UP-NS merger would have 45% of total U.S. tonnage. For context, the recent CP and KCS merger resulted in control of 5% of the U.S. market.
“Captive shippers will cover the $85 billion price of the merger, despite UP claims that it will be paid for through 10% growth in three years.”
“300 intermodal lanes [will be] eliminated if [the] merger is approved. After the [most recent] major round of mergers [in the late 1990s], 90 intermodal facilities closed, resulting in several hundred fewer intermodal lane options and communities permanently losing their intermodal access.”

“BNSF is not looking to create a national duopoly,” the position paper noted. “BNSF doesn’t believe the appropriate competitive response is for BNSF to acquire CSX at this time. We should not be viewed as the fix to correct the competitive imbalance that UP [and] NS are trying to create. Wall Street and UP would like to force BNSF into a competing merger that creates a coast-to-coast duopoly controlling [more than] 90% of our nation’s rail traffic.”

The operative words are “at this time.” It’s widely understood that if the UP+NS transaction is approved, BNSF will be forced into a position to do something—and CSX will be a willing partner under newly-minted President and CEO Steve Angel. Joe Hinrichs was let go primarily for one reason: He opposed immediately pursuing a combination with either BNSF or CPKC—both of which said, “not interested.” Activist investor Ancora, whose CSX holdings are miniscule, has been the public voice calling for CSX to seek a merger partner, attacking Hinrichs and calling for his ouster. The actual hedge funds that pressured CSX’s Board, Sachem Head Capital Management and Elliott Management, prefer to remain quiet, according to my source.

Most railroaders know very little about Angel, 70, beyond that he is highly skilled at merging large companies and worked for General Electric’s locomotive business unit many years ago. According to CSX’s Sept. 26, 2025 SEC 8-K filing, Angel, when CEO of industrial gases company Linde AG from 2018 to 2022, “oversaw the successful integration of Linde AG and Praxair, Inc., which created the world’s largest industrial gases and engineering company.” Prior to its merger with Linde, Angel served as Praxair Chairman, President and CEO from 2007 to 2018, “helping guide Praxair through significant transformation while identifying and pursuing strategic growth initiatives.”

Though not specifically mentioned in the 8-K, Angel’s CSX compensation package is directly tied to his successfully executing a merger with another Class I to form a U.S. transcontinental, provided the UP+NS marriage is approved. Presumably, CSX’s partner will be BNSF.

“In connection with his appointment as CEO and President, [CSX Corporation] and Mr. Angel have entered into an employment letter, dated Sept. 26, 2025 … under which Mr. Angel will receive an initial annual base salary of $1.5 million and will have an initial annual target bonus opportunity under the Company’s Management Incentive Compensation Plan of 175% of base salary,” CSX’s 8-K said. “In addition, Mr. Angel will receive a Sign-On Equity Award under the Company’s 2019 Stock and Incentive Award Plan having a grant date target value of $10 million comprised (i) 50% of performance share units that will be eligible to be earned based on the achievement of performance criteria applicable to the Company’s 2025-2027 long-term incentive program, and any units that are earned will vest and become payable on the third anniversary of his employment start date, and (ii) 50% of stock options that will cliff vest on the third anniversary of Mr. Angel’s start date and will have an exercise price equal to the closing price per share of CSX common stock on the grant date and a seven-year term. Beginning in 2026, Mr. Angel will be eligible to receive an annual Long Term Incentive Award under the Company’s long-term incentive plans on a substantially similar basis as other similarly situated executives of the Company, with the initial grant to be made in 2026 having a grant date target value of $13.5 million. The Company will also provide Mr. Angel with corporate housing in Jacksonville, Fla., will reimburse Mr. Angel for up to $100,000 in non-refundable expenses incurred by him for personal trips cancelled in 2025, and will provide up to $200,000 per year for his personal use of the corporate aircraft.”

Not a bad deal, eh? But if it were me, I’d prefer the CSX executive train. Much nicer than a tin can with wings, right?