BNSF challenges Union Pacific Norfolk Southern merger

Union Pacific Norfolk Southern merger plans are back in focus. The two railroads are preparing to refile their rail merger application. According to Union Pacific, the deal would create the nation’s first transcontinental freight rail line. It would cover more than 50,000 route miles across 43 states.

Also, the proposed combination would connect about 100 North American ports. Freight would not need to move between rail companies from coast to coast.

Union Pacific Norfolk Southern merger timeline and STB review

The merger process first moved ahead on July 28, 2025. That day, Norfolk Southern agreed to acquisition terms. Those terms included a promise of $85 billion. The promise was in stock and cash options from Union Pacific. The promise was subject to approval.

Meanwhile, the two carriers filed a notice of intent one day later. They sent it to the Surface Transportation Board. They submitted a formal application on Dec. 19, 2025. According to the Surface Transportation Board, the STB rejected it on Jan. 16 as incomplete.

In addition, the companies have said they intend to file again by April 30, as previously covered by Railway Supply. After a new submission, the Surface Transportation Board will have 30 days. It will decide whether to accept or reject the proposal.

Separately, the merger came up repeatedly at the National Grain and Feed Association conference. It was the 130th annual event. The conference took place in Nashville on March 22-24. At the transportation open forum on March 22, STB Chairman Patrick Fuchs addressed the application. He said he was “extraordinarily limited” in what he could say about the application.

“I have to protect the integrity of the process,” Fuchs said during the conference’s transportation open forum on March 22. “So, I’m not going to get into anything regarding the merits or anything that’s not public.”

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BNSF criticism on rates, volume and shipper options

Also, Katie Farmer addressed the issue during a fireside discussion at the conference’s opening session on March 23. She is BNSF’s president and chief executive officer.

“I’m happy to give you my perspective,” Farmer said, before adding, “but I don’t think it’s quite as interesting as what your perspective is.”

Farmer’s rate and volume arguments

Farmer has spent 35 years at BNSF. She has spent her entire rail career with the company. She said she has experienced three successful Class I mergers and one that failed.

“I think history is important, and I think looking at the facts are important,” she said. “I think this is not good for our industry. I think it’s going to reduce the options that you have. I think it’s going to raise rates. And that’s where BNSF is as well.”

Still, she said the combined operations would account for more than half of all rail volume. She said she does not see how that would give shippers more choice. She also said it would not give them more competitive rates. Farmer also argued that Union Pacific’s earlier merger did not deliver better efficiencies for customers.

“If you look at the application, what it says is that over the next three years, they’re going to grow their volume by 12%,” she said. “If you go back and look at the last 10 years since the Union Pacific-Southern Pacific merger, their volume has declined by 13%. So, somehow, in three years, we’re going to go to 12% in volume, since the last merger (their volume) has declined by 13%.”

She then warned that, if past patterns repeat, shippers could end up carrying the merger costs.

“If I were a customer, what I’d also be concerned about is if that growth doesn’t materialize, like it hasn’t in the past, how are they going to pay for an $85 billion merger with a $15 billion premium?” Farmer asked. “Again, we’ll go back and look at history. The volumes have decreased double digit in the last 10 years, but interestingly enough, Union Pacific’s rates are 37% higher than the average Class I.”

Oliver Wyman study findings

For example, Farmer also pointed to the Oliver Wyman study from November 2025. Its title was “Bridging the Rail-Shipper Gap.” The study asked senior transportation and procurement professionals why their companies choose trucks instead of rail for freight movement. She listed the top three reasons highlighted in that study.

“The first one breaks my heart,” Farmer began. “Unresponsiveness of the rail industry. So, a lack of responsiveness to you, our customers. Second, our rates, and the third is reliability. So again, I ask you, is this unprecedented consolidation in an already consolidated industry going to solve the responsiveness, the rates, and do we need a merger?”

Support claims, congressional response and new rail merger rules

Meanwhile, both Farmer and Fuchs also referred to the reaction the application has drawn. Fuchs said more than 90 members of Congress have sent letters to the STB. Farmer, meanwhile, summarized the support Union Pacific cited in its filing.

Support claims and congressional response

“UP touts that they have 2,000 companies that are in support of this merger,” Farmer said. “If you actually look at the application, there’s less than 500 customers, and of those 500 customers, they make up less than 6% of all the rail volume that exists today. Conversely, the real Customer Coalition, who represents 50% of all rail customers, have come out publicly and said that if this unprecedented consolidation happens, that every farmer, every manufacturer, every energy producer, and the American consumer is going to pay for this merger. The teamsters who represent the folks who operate our locomotives, our engineers, and who maintain our track, couldn’t find a way to get to yes because they know there will be reduced service and reduced good American paying jobs.”

In addition, Farmer added that around 72 members of Congress have either opposed the merger outright or urged the STB to conduct a rigorous review because of their concerns.

New rail merger rules

Separately, she also said the application is unusual. It will be the first rail merger application examined under the new rail merger rules. Those rules were adopted more than two decades ago.

“They’re called the new merger rules, which I find ironic, because they were created in 2001, so they’re 25 years old now, and they’ve never been tested,” Farmer said.

Also, Farmer explained a key distinction between the “old” rules and the “new” ones. Applicants now must show that a merger serves the public interest. In addition, they must show that it enhances competition rather than merely preserving it.

Committed gateway pricing and BNSF objections

Also, in the application, Union Pacific said it would keep gateways open. It also said it would provide committed gateway pricing to improve competition.

Meanwhile, Farmer challenged both claims. She said UP had not supported open gateways when it commented on earlier merger applications. She also argued that the proposed committed gateway pricing was extremely narrow in scope.

“If you look at the details, which is really important, and you look at all of the folks that are excluded from using this committee gateway pricing, it’s any unit train shipper,” Farmer said. “Even though this is about converting from truck to rail, no intermodal shipper can use it. No coal customer can use it. No hazardous commodity shipper can use it. No automotive customer can use it. So, if I go through all of the exclusions, by our calculations, it’s about four tenths of a percent of all current rail shippers that can use this committed gateway pricing. And if you’re lucky enough to be one of those four tenths of a percent, you get the top third of the rates that are published out there, and you get it for only the period of time that the STB has oversight.”

At the end of the March 23 discussion, Farmer returned to the history behind past rail mergers. She also returned to the conditions that drove them.

“Our railroad is a compilation of a bunch of different railroads,” she said. “But in the past, there were driving reasons for railroad mergers. Either they were financially challenged railroads that needed to have a merger, or we had customers that could see the benefit of the merger. We were in an industry where we had hundreds of railroads. It’s not where we are today. We have six Class I railroads and a healthy Shortline industry. So, it’s just that the times aren’t even the same.”

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