The Corner Newsletter: Next Railroad Crisis? And Sandeep Vaheesan’s Electric Essay (March 10th, 2026)
Welcome to The Corner. In this issue, we explore the sobering lessons of the last big railroad merger to evaluate the proposal to merge Union Pacific and Norfolk Southern.
Will a Union Pacific-Norfolk Southern Deal Further Wreck U.S. Railroads? The Past as Prologue
Arnav Rao
When regulators approved the merger of the Canadian Pacific and Kansas City Southern railroads in 2023, executives promised a radical turnaround for freight rail. Although the U.S. rail system had been ceding traffic to dirtier, more unsafe trucks for over a decade, executives argued that the “efficiency gains” from a larger railroad would lure trucks off the highway and result in more railroad jobs, not fewer.
Nearly three years later, however, few of those promises have come true, a result that carries direct implications for regulators now evaluating what would be the largest rail combination in U.S. history: the proposed merger between Union Pacific Railroad and Norfolk Southern Railway. The key lessons? That if approved, the latest merger would likely raise shipping prices, reduce service, and maybe even trigger freight disruptions, not to mention result in some empty shelves for the public.
In their merger application, Canadian Pacific and Kansas City Southern said the transaction would boost the ability of the railroads to compete with trucking companies. Because the two railroads had limited network overlap, executives argued that there would be no cut in competitive options for most shippers, and that instead customers would benefit from a single-line railroad connecting the United States, Canada, and Mexico. The logic was simple: a combined railroad could avoid the time-consuming “interchanges” required when one railroad hands freight off to another. Executives promised that the new efficiencies would enable the new CPKC to convert 64,000 truckloads annually from road to rail, reducing congestion and pollution on U.S. roads.
Yet outcomes have been far more modest. For the entirety of 2025, CPKC managed to convert only a quarter of what they promised, and rail has continued to lose modal share. And instead of creating 800 new union jobs, as promised, CPKC today employs 5 percent fewer workers than when the deal closed.
In retrospect, regulators should have been able to predict exactly this outcome. Shippers who today ship by truck need strong incentives to switch to rail. This includes lower prices for service. It also requires improving services, such as by extending rail to new industrial sites, improving first- and last-mile logistics, increasing terminal and track capacity, boosting operating workforces, and stronger marketing. This in turn requires combining new investments with a willingness to wait years to earn a profit.
Yet over the past decade, America’s freight railroads have largely moved in the opposite direction. Thanks to deregulation, carriers have been able to adopt a cost-cutting operating philosophy known as precision-scheduled railroading (PSR), which prioritizes using service cuts to boost short-term financial performance, such as through closing essential facilities, reducing headcount, consolidating yards, and shedding lower-margin traffic. At the same time, railroads have raised prices more than 30 percent faster than inflation.
This liquidation of freight rail infrastructure not only chases existing traffic off the rails and onto roads, but because of the lower weight limits on highways, it also limits the ability of corporations to locate certain types of heavy industry within the borders of the United States.
Now, executives at Union Pacific (UP) and Norfolk Southern (NS) are using much the same assumptions that animated the merger that created CPKC to make their case for combination. Much as the CP and KCS executives did in 2023, UP and NS argue that eliminating interchanges and creating longer single-line routes will unlock new traffic and produce rapid freight rail growth. The main difference is scale, as UP is claiming that a merger will allow them to convert more than two million trucks from road to rail annually. Not only does this promise rest on the same flawed assumptions as CPKC, but actually achieving such targets would require a rate of growth that no modern freight railroads has ever achieved in history.
Moreover, the UP and NS executives have entirely failed to explain how they will address the structural barriers that limited CPKC’s performance. In the case of UP and NS, this includes recent decisions to eliminate low-traffic branch lines that serve industrial shippers, the shuttering of vital intermodal terminals, and regular PSR-induced meltdowns that chase away any customer that requires guaranteed on-time service. Not only have the two railroads not promised to restore any of this infrastructure and services, but they have also not promised to maintain their present capacities.
The proposed Union Pacific–Norfolk Southern merger asks regulators to accept once again that merger-related “efficiency” gains will translate into public benefits. But the most recent real-world test of that theory — the merger of CP and KSC — suggests otherwise. If the industry’s most recent major combination failed to deliver promised traffic growth and create new jobs, there is little reason to believe that a far larger consolidation will succeed in delivering such benefits.
Open Markets EU Research Fellow Urges Revision of Merger Guidelines at European Commission Conference
Open Markets Institute’s Europe Research Fellow Claire Lavin spoke at a conference in Brussels hosted by the the European Commission on the revision of the merger guidelines and took part in the Implementation Dialogue with EU competition commissioner Teresa Ribera. Calling for stricter merger control in light of the impact of market concentration on the cost of living, Lavin advocated for the adoption of a broader approach that looks at how acquisitions have an impact on smaller businesses, workers, citizens and on our democracies.
UK’s Prospect Mag Publishes Cover Story on Antimonopoly Movement, Citing Barry Lynn’s Influence
The UK’s Prospect Magazine published a cover story on the “New Brandeisian” antimonopoly movement, describing how whereas a century ago Americans aimed to break up “the empires of industrial robber barons” today’s “anti-monopolists want to do the same…to tech.” The magazine focuses on Open Markets Institute executive director Barry Lynn’s profound influence on the origins and direction of the effort, writing “The movement’s founding father is a punchy former business journalist from Miami named Barry Lynn, who prides himself on getting up the noses of the orthodoxy’s pooh-bahs,” the story read. Read the full story here.
New York Review of Books Publishes Legal Director Sandeep Vaheesan’s Essay on Electric Power and Monopoly
In an essay entitled “Building the Electrostate” in The New York Review of Books, Open Markets legal director Sandeep Vaheesan makes a case for expanding public ownership in the U.S. electric power sector, arguing it‘s the best way to secure affordable energy and decarbonization. Drawing from his book Democracy in Power: A History of Electrification in the United States, Vaheesan traces the history of publicly owned electricity to the New Deal era when the Tennessee Valley Authority and the Rural Electrification Administration brought light and power to all parts of the United States. Noting that in the present day, one in four power customers are served by one of the more than 2,500 publicly owned utilities and rural electric cooperatives, Vaheesan writes, “Even today, publicly owned utilities charge less and resolve outages faster on average than their investor-owned counterparts.” Read the full essay here.
📝 WHAT WE'VE BEEN UP TO:
Open Markets Institute’s legal director Sandeep Vaheesan published an article in The Sling on how union-busting should be treated as an illegal monopolistic practice under antitrust law because it gives firms an unfair competitive advantage by violating workers’ rights and undermining law-abiding rivals. Vaheesan concludes that antitrust practitioners should treat union-busting as illegal conduct actionable under Section 2 of the Sherman Act.
The Guardian quoted Courtney Radsch, director of the Center for Journalism & Liberty at Open Markets on the potential for a merger between Paramount-Skydance and Warner Bros. Discovery to stymie free speech and result in another state-aligned broadcast network as has happened with CBS. “There certainly appears to be an unprecedented level of politically motivated involvement as Trump seeks to defang major news networks,” Radsch told The Guardian.
Radsch also issued a statement on the proposed merger on behalf of CJL@OMI, saying, “What is needed now is not another merger but intentional restructuring—policies that promote distributed markets for film, news, and information, strengthen independent and local media, and reduce the outsized gatekeeping power of dominant firms.” Her statement was covered by the Washington Times.
Variety quoted Open Markets Europe director Max von Thun on the likelihood that European regulators will approve Warner Bros. Discovery’s merger with Paramount–Skydance since CNN is “not a significant player in Europe’s national media landscapes” and the EU “rarely blocks merger deals.” He was also quoted in a Variety story a couple of weeks earlier on the same topic.
OMI legal director Sandeep Vaheesan spoke at the Texas A&M University School of Law’s annual Energy Law Symposium, where he discussed how public power offers the most promising path to building an affordable, reliable, and clean power system.
Open Markets Europe director Max von Thun joined a panel on enforcement of the Digital Markets Act at the Centre on Regulation in Europe’s Digital Platforms Summit, where he emphasized the need for governance to involve all relevant stakeholders, not just gatekeepers, and called for more financial resources to be allocated to DMA enforcement. His panel was followed by a keynote from Margrethe Vestager, the former EU Competition Commissioner.
CJL@OMI director Courtney Radsch spoke at the AI Sales Summit 3.0, where she highlighted the ethical risks of AI in B2B sales and called for bias-aware and transparent systems. She raised concerns about feedback loops and employee data rights in procurement decisions and urged participants to replace the term “hallucination” with more accurate language such as “fabrication” when evaluating AI tools.
Open Markets transportation analyst Arnav Rao spoke to Tradewinds News on the need for a government-led revitalization of U.S. commercial shipbuilding. “With the neoliberal free trade revolution that happened in the late 20th century, we really stopped providing that esssential government support,” Rao said, noting that East Asian nations by contrast began recognizing at the time that government support of the shipbuilding industry was critical. Rao’s remarks begin at 4:38.
The U.S. Naval Institute’s Global Maritime Industry Year in Review cited research from a seminal maritime policy report published by the Open Markets Institute last year showing that the United States now produces just 0.13 percent of the world’s large commercial vessels, underscoring the steep decline of the nation’s shipbuilding capacity and the strategic risks it poses for U.S. maritime competitiveness.
In an article on New Mexico’s support of the child care industry through new initiatives, KRWG Public Media said the Open Markets Institute has raised concerns about rapid expansion by investor-backed chains that prioritize enrollment growth and cost-cutting over care quality. Last month, Open Markets published “The Children Before Profits State Playbook” to equip state and local organizers, advocates, and policymakers with practical tools to stop the encroachment of private equity into child care.
In Heatmap News, Open Markets Institute legal director Sandeep Vaheesan weighed in on a fight for publicly owned power in New York’s Hudson Valley. “If you take shareholders out of the picture — if you replace private debt with cheaper public debt — you can lower rates pretty quickly and bring energy bills down,” Vaheesan argued.
🔊 ANTI-MONOPOLY RISING:
California’s attorney general Rob Bonta said the state will investigate a proposed $110 billion merger between Paramount Skydance and Warner Bros Discovery after Netflix abandoned a takeover. The Paramount/WBD deal, which could lead to massive layoffs in Hollywood, would have to pass muster not only with the Department of Justice but individual U.S. states and Europe. (The Guardian)
The Belgian Competition Authority has initiated proceedings against Google for anticompetitive practices in the online advertising sector, motivated by the ongoing uncertainty surrounding potential remedies in U.S. and EU cases targeting Google’s adtech business combined with continued reports of problematic practices by the tech giant. (Belgian Competition Authority)
Japan’s antitrust regulator is investigating Microsoft for restricting customers of its Azure cloud computing platform from using rival services. The country’s Fair Trade Commission raided the tech giant’s Japan offices as part of the probe. (CNBC)
Spain has accused Apple and Amazon of ignoring an antitrust order for nearly two years, saying it may issue new fines on top of the original one of a combined $230 million. The country’s National Markets and Competition Commission say the two companies failed to quickly comply with an order to change contract clauses linked with Amazon’s role as a reseller of Apple products, effectively blocking 90% of retailers selling Apple devices on Amazon’s Spanish website. (Wall Street Journal)
📈 VITAL STAT:
$17.5 million
The amount American Express (Amex) has agreed to pay to settle a class action antitrust lawsuit over claims it prevented merchants from encouraging customers to use rival credit cards. The financial services corporation was accused of forcing merchants to raise their prices in order to cover Amex fees, resulting in consumers who did not use Amex cards paying more than they would have. (Top Class Actions)
📚 WHAT WE'RE READING:
The Dark Side of Private Equity: An anonymous law school professor published an article in the University of Chicago Business Law Review arguing that private equity’s core tools of high leverage, cash extraction, and short-term exit incentives externalize risks to workers, healthcare patients, consumers, unsecured creditors, and communities. To address this problem, the author proposes a regulatory framework to internalize these costs, including leverage-indexed insurance and bonding, minimum staffing and quality standards, and ownership-linked disclosure reforms focused on key sectors such as healthcare, energy, education, and childcare.