Shintech throws weight behind UP-NS rail merger as rivals cry foul
US PVC giant Shintech backs Union Pacific-Norfolk Southern tie-up, citing eastern US market access
The proposed merger between Union Pacific (UP) and Norfolk Southern (NS) has secured a key supporter in Shintech, the largest U.S. producer of polyvinyl chloride (PVC). The company argues the deal will streamline access to eastern markets, cutting costs and improving delivery times.
In a letter to the Surface Transportation Board (STB), Shintech President Yasuhikoh Saitoh stated the merger would “increase speed, reduce costs, enhance competition, and improve the U.S. supply chain.” Saitoh emphasized that UP currently handles all of Shintech’s rail shipments from its three production sites in Louisiana and Texas, highlighting the railroad’s reliability and competitive pricing as critical to the company’s growth.
“As a solely served customer, Union Pacific transports 100% of our rail traffic from each of our three production locations. We rely on them to transport our products safely, reliably, and efficiently, and we also depend on them to provide competitive pricing that allows us to win business both domestically and globally so we can continue to grow.”
Yasuhikoh Saitoh·President of Shintech
Shintech, the U.S. subsidiary of Japan’s Shin-Etsu, operates plants in Plaquemine and Addis, Louisiana, and Freeport, Texas. Its PVC products are used in pipes, flooring, medical devices, and packaging. Saitoh praised UP’s investments in Gulf Coast infrastructure, including expanded storage yards near Shintech’s facilities, and expressed optimism that the merger would enable single-line service to eastern markets, further boosting efficiency.
The STB, which must approve the merger, has faced opposing views from industry stakeholders. While Shintech supports the deal, trade groups representing chemical manufacturers have raised concerns about potential anti-competitive effects.
Short-line railroads raise concerns over market power: Shintech
Smaller rail operators, known as short lines, have warned that the merger could harm their business. George Avery Grimes, a former executive at Union Pacific, Missouri Pacific, and Kansas City Southern, submitted a 23-page filing to the STB arguing that the combined UP-NS system would wield excessive market power, threatening short lines and their customers.
“UP’s filings in this docket suggest increased density and capacity constraints, and its asymmetry of power extends to the competition for capacity between high-priority PSR operations and lower-priority local services.”
George Avery Grimes·Former railroad executive
Grimes, who also held leadership roles at short-line holding companies OmniTRAX and Patriot Rail, urged the STB to dismantle “artificial market barriers,” such as restrictive interchange agreements, and adopt service standards to protect shippers. Without such measures, he warned, the merged railroad could prioritize high-margin traffic over local services, squeezing short lines out of the market.
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