Union Pacific–Norfolk Southern merger application faces completeness fight

Union Pacific–Norfolk Southern merger application is drawing pushback from other Class I railroads, which say the filing leaves out details the Surface Transportation Board needs before the review can move ahead.

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

What’s being debated at this stage is completeness, not the merits of the deal. Interested parties had until Monday, Dec. 29, to weigh in on whether the STB should send the 6,692-page application back to UP and NS for more information. UP and NS filed on Dec. 19, have until Jan. 2 to respond, and the STB is expected to decide later in January whether to accept the application.

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Surface Transportation Board completeness review draws objections

One of the biggest issues raised is the missing UP-NS merger agreement. Canadian Pacific Kansas City, Canadian National, CSX, BNSF and others argue that the full document should be in the record so the board and stakeholders can see the terms that could shape the transaction’s competitive and public-interest impact.

In its filing, CPKC says the applicants “brazenly” withheld key aspects of their agreement, a position also reflected in a CPKC statement summarized by Railway Supply. It points to conditions under which NS could sue to require UP to proceed, as well as provisions that could allow UP to walk away. CPKC argues those terms may offer the best indication of how the applicants view potential anticompetitive harms and what conditions may be sought—yet resisted—to address them.

CN makes a similar argument, saying selective disclosure undermines the regulatory process and complicates an assessment of the merger’s true character and public-interest impact. CN also cites board precedent in saying the application is deficient without the complete merger agreement.

Competition impacts and rail-to-rail competition analysis disputed

CPKC’s comments also take aim at what it describes as an incomplete assessment of how the merger could affect competition, including potential follow-on consolidation. UP and NS said they could not predict whether other railroads would choose to merge as a result and called it too “speculative” to evaluate the future structure of the industry.

CPKC disputes that, saying it “strains credulity” to suggest the applicants have not examined the issue and warning the deal could point toward a “Transcontinental Rail Duopoly.” It also argues the filing downplays potential downstream impacts of a UP-NS merger.

CSX, meanwhile, focuses on the competitive framework itself. It says the application does not explain how a merged system’s single-line service would enhance rail-to-rail competition, arguing the statute calls for an assessment of competition among rail carriers—and that a truck-to-rail analysis cannot substitute for that.

Data, market share and specific asset issues highlighted

CPKC also criticizes the data behind what it calls the application’s “extraordinary claims.” One example is the projection that the merger would convert more than 2 million truckloads to rail. CPKC says the estimate relies on S&P Global Markets Transearch data that was not included, meaning interested parties would need to buy it themselves. In a footnote, CPKC says it was quoted $399,000 for that data.

CN, in a 91-page filing with exhibits, says the application does not identify all shippers that would shift from being served by two railroads to one, and from three railroads to two. CN also says the filing omits information about overlapping lines in the watershed area within 250 miles of the Mississippi River—an omission it argues reflects another attempt to portray the transaction as end-to-end.

BNSF points to the STB’s 2001 merger rules and says required projected market shares are missing. It argues the economist cited in the filing treats projected shares as simply the combined UP and NS market shares in 2023, without accounting for the more than 2 million new units the applicants say they will attract elsewhere. BNSF says that approach does not meet the rule’s requirements for reflecting the consolidated company’s marketing plan and assessing competitive impacts across U.S. regions.

CSX also says the filing fails to address control of the Norfolk & Portsmouth Belt Line Railroad, an issue already before the STB in a separate dispute between CSX and NS. CSX argues that saying UP intends to abide by the board’s resolution would not cure the deficiencies. It asks the STB to require a separate significant transaction application for NPBL, and another for control of the Terminal Railroad Association of St. Louis, which the UP-NS filing treats as a minor transaction.

Union Pacific CEO Jim Vena, in a Dec. 19 interview with Trains, said he expects the board to request additional information. “There’s probably something we missed or something they need a little more information on,” Vena said, adding that UP plans to provide whatever data the STB requests as quickly as possible so the review is not slowed. “I’m absolutely sure they’re going to come back with something,” he said.

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