Regulator Orders Union Pacific to Release CEO Speech as Rail Volumes Climb

US rail regulators have ordered Union Pacific Corp. to make public a recording of a speech in which its chief executive allegedly threatened to raise rates on shippers that oppose its takeover of Norfolk Southern Corp. The regulators also warned that any retaliation could weigh on the fate of the deal.

The Surface Transportation Board on Wednesday rejected Union Pacific’s appeal to keep Chief Executive Officer Jim Vena’s March 17 keynote confidential, saying the railroad had filed two days too late. The board gave Union Pacific until 5 p.m. on Thursday to lift the confidential label and certify that it had done so.

Vena gave the speech to about 900 people at a Southwest Association of Rail Shippers meeting in Houston. “That confidentiality no longer exists,” the board said, noting that the remarks had already been delivered in public.

The board said it “will not tolerate actual or threatened retaliation” against stakeholders. It said such evidence could bear on whether the case proceeds and on its assessment of market power. Union Pacific has said Vena “did not threaten anyone” and that his remarks were taken out of context. If the railroad fails to comply, the board said, it expects to pause the review, including the Nov. 18 deadline for public comments.

The dispute comes as freight volumes keep rising. US rail traffic rose 3.5% in the week ended Oct. 31 from a year earlier, the Association of American Railroads said on Wednesday. Carloads gained 3% and intermodal units 3.9%. Seven of 10 commodity groups rose, led by metallic ores and metals.

So far this year, US carloads are up 2.7% and intermodal volumes 4.7%. Mexican intermodal traffic jumped 26.9% for the week.