Union Pacific-Southern Pacific Merger
Union Pacific-Southern Pacific Merger took effect on September 11, 1996, after Surface Transportation Board approval, and integrating the two railroads set off a 1997 service crisis that began around Houston and spread across the western United States.
What happened and why it matters
The UP-SP merger is the standard example of how a rail network can seize up when two systems are combined too fast. In summer 1997, congestion in Houston-area yards spread through the West, Pacific Coast, Gulf Coast and Midwest, leaving trains and rail cars stalled for days. The Surface Transportation Board issued an emergency service order in late 1997 that let BNSF serve some Union Pacific customers. Shippers lost production and sales while waiting for cars. Shippers still watch rail mergers and service metrics closely, and many keep truck or alternate rail options for critical freight.