Opposition to Union Pacific-Norfolk Southern merger grows among trade groups

Opposition to Union Pacific-Norfolk Southern merger is in focus as more than 60 trade associations and chambers of commerce urge the Surface Transportation Board to reconsider Union Pacific Corp.’s planned acquisition of Norfolk Southern Corp.

This is reported by the railway transport news portal Railway Supply.

The groups warn that the rail deal could further weaken competition across the U.S. freight rail industry, a concern also reflected in recent coverage by Railway Supply.

Union Pacific first announced its acquisition of Norfolk Southern on July 29, 2025, disclosing an agreement to buy the Eastern Class I railroad in a transaction valued at $85 billion. Less than three months later, the proposed combination is described as the largest railroad merger in U.S. history and is drawing organized resistance from shipper and industry groups worried about rail industry competition and consolidation.

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Last week, more than five dozen business organizations sent a letter to the Surface Transportation Board (STB) formally opposing Union Pacific Corp.’s proposed acquisition of Norfolk Southern Corp. Among the signatories are the West Virginia Manufacturers Association, the Ohio Chemistry Technology Council, the Kentucky Association of Manufacturers and the Rail Passenger Association.

Collectively, these trade associations and chambers of commerce argue that the UP–NS rail deal would erode what little competition remains in the sector, echoing concerns highlighted by the American Chemistry Council.

Shareholders of both Norfolk Southern Corp. and Union Pacific have already endorsed the transaction. On Nov. 28, investors in the two Class I railroads voted to approve the agreement that would allow Union Pacific (UP) to acquire and absorb Norfolk Southern (NS) in a deal valued at $85 billion, even as the Surface Transportation Board continues its review.

Opposition to Union Pacific-Norfolk Southern merger from shippers and manufacturers

The American Chemistry Council, which had previously said it opposes the acquisition, is among the groups that signed the latest letter. In their submission to the STB, the organizations emphasize that the history of rail consolidation in the United States has come at a steep cost to shippers and the broader economy, reducing choices and pushing transportation costs higher.

“History has shown that increased rail consolidation leads to fewer choices, higher transportation costs, service disruptions, and reduced economic competitiveness. Today, just four Class I railroads control more than 90% of freight rail traffic. The proposed UP/NS transaction would be the largest rail merger in history and would put control of more than 40% of rail traffic in the hands of a single railroad. It would further weaken the small amount of competition that currently exists in the railroad industry,” the letter states, underscoring worries that a single railroad could handle more than 40% of freight rail traffic.

The signers also caution that the U.S. supply chain could face additional strain if this major rail industry consolidation goes ahead. “Past rail mergers have triggered major breakdowns in the supply chain and increased costs for businesses and consumers alike. Given the potential for widespread economic harm, it is essential that the Surface Transportation Board proceed with great care.

The creation of a transcontinental railroad must not come at the expense of competition, service reliability, or the broader health of the U.S. supply chain,” they write, calling on the board to fully weigh the risks and proceed with great care in its review of the Union Pacific-Norfolk Southern rail merger.

Fortress Investment Group rail deal wins STB approval

While the UP–NS megamerger encounters strong opposition, the STB did sign off last week on a separate, smaller-scale acquisition that could affect northern West Virginia. In this case, the board approved a Fortress Investment Group acquisition that will bring two regional carriers into its portfolio: Wheeling & Lake Erie Railway Co. (W&LE) and Akron Barberton Cluster Railway Co. (ABC).

The transaction adds to Fortress’s existing portfolio of six Class III rail carriers. W&LE, classified as a Class II carrier, operates a network spanning roughly 982 miles of track across Ohio, Pennsylvania, West Virginia and Maryland. ABC is a Class III carrier that runs approximately 84 miles of track in and around Akron, Ohio. Taken together, they form important regional links that connect with larger railroads, including Norfolk Southern.

The W&LE line crosses West Virginia’s Northern Panhandle on a corridor between Steubenville, Ohio, and Pittsburgh. Another segment follows the Ohio side of the Ohio River in the same area and then crosses the river via a bridge to reach West Virginia south of Wheeling. In addition, W&LE connects with Canadian National Railway at Toledo and maintains several interchange points with Norfolk Southern and other railroads, giving shippers multiple routing options in this part of the network.

In its written decision, the Surface Transportation Board concluded that the Fortress Investment Group acquisition of W&LE and ABC satisfies the applicable statutory criteria and will not result in significant impacts on competition.

The board also found that bringing W&LE and ABC under Fortress’s ownership should enhance both carriers’ access to capital and therefore support strategic investment decisions and future growth opportunities, in contrast to the unresolved questions around the much larger Union Pacific-Norfolk Southern merger.

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