STB Tells Railroads to Take a Breather from Mergers
March 17, 2000
The U.S. Department of Transportation's Surface Transportation Board has told large railroads not to pursue further merger activities until it can come up with new rules governing merger proceedings. STB said it would take about 15 months to adopt new rules.
The decision came after four days of hearings triggered by the recently proposed merger of the Burlington Northern Santa Fe (BNSF) and the Canadian National railways.
STB noted that the railroad industry has consolidated aggressively in recent years, leaving only six large railroads remaining in the U.S. and Canada.
"But merger implementation has not typically gone smoothly, and indeed the railroad industry and the shipping public have not yet fully recovered from the service disruptions associated with the previous round of mergers," the agency said.
STB also said that testimony at the hearing confirmed that a BNSF/CN combination would likely touch off responsive mergers among the four other large railroads. Therefore it has decided not to permit further major rail mergers until the regulations are revised.