USA: Union Pacific and Norfolk Southern have nearly doubled the traffic eligible for one of their proposed merger protections, but the larger number does not mean that 257,971 carloads would receive lower rates or a competitive benefit.

UP-NS merger application moves into STB review
Union Pacific Railroad/Norfolk Southern Railway

The July 27 supplemental response expands Committed Gateway Pricing, or CGP, from 133,890 eligible annual carloads to 257,971 using 2024 traffic data. Union Pacific says the broader program adds agricultural and other bulk unit-train traffic and extends the mechanism to more customers that would not directly gain a new single-line option from the proposed combination.

That is a material change in program scope. It is also a case where the denominator matters: eligibility describes traffic that may qualify for a pricing mechanism. It is not an observed savings figure, a guaranteed rate reduction or an STB finding that the merger enhances competition.

The 257,971 figure contains a smaller modeled subset

The applicants’ analysis identifies 103,676 carloads as potentially able to benefit immediately within the expanded 257,971-carload eligible pool. That smaller figure is a subset, not a third peer total. Dividing 103,676 by 257,971 gives about 40.2%, but the percentage is only a calculation describing the relationship between the applicants’ modeled subset and the expanded eligible pool.

Don’t miss…Explore Canada for Less with the Canada Strong Pass

The distinction matters because the three figures answer different questions. The original 133,890 and expanded 257,971 totals can be compared as two versions of eligibility. The 103,676 figure instead describes a modeled subset inside the expanded total. None of the three demonstrates realized customer savings.

Figure Status What it means
133,890 carloads Initial CGP eligibility Traffic eligible under the earlier proposal
257,971 carloads Expanded CGP eligibility Larger eligible pool after the July 27 supplemental response
103,676 carloads Applicants’ modeled subset Traffic within the 257,971 pool identified as potentially immediately benefiting
40.2% Railway Supply calculation 103,676 divided by 257,971; not a share of all UP–NS or U.S. rail traffic
70% Original ETA / 85% Industry Spot & Pull Proposed Targeted Access thresholds Service-performance levels relevant to access eligibility
30 days / six months Proposed Targeted Access timing Cure period, followed by six months of reciprocal switching if relief is ordered

Targeted Access starts only after defined deterioration

The proposed Targeted Access Program addresses a different problem. It would apply to sole-served customers in terminal areas after service deteriorates from pre-merger levels and falls below specified performance thresholds: 70% for Original ETA or 85% for Industry Spot & Pull.

The proposal includes a 30-day cure period. If the problem is not cured and the customer prevails through the proposed expedited process, reciprocal switching would last six months. That makes the protection reactive and temporary: it is designed to create an alternative after defined service deterioration, not to give every sole-served customer permanent access to a second railroad from the first day of a merger.

UP and NS also propose preserving Class I access for certain facilities that would move from two rail options to one, or from three to two, using trackage rights, haulage or another mutually acceptable arrangement where access can legally be granted.

BNSF’s “about 1%” argument uses a broader frame

BNSF’s July 28 response says the expanded CGP program would be available to “about 1% of rail shipments.” That is an attributed BNSF characterization, not an STB finding. The public statement does not provide the denominator needed to reconstruct that percentage directly, so the comparison should not be treated as mathematically interchangeable with the applicants’ 257,971-carload eligibility count.

The wording has also changed with the proposal. Before the July expansion, BNSF described the earlier CGP plan as covering less than 1% of traffic and, in January, said only 0.4% of all rail freight would be eligible. After UP and NS nearly doubled the eligible pool and added unit-train traffic, BNSF’s latest public formulation is “about 1% of rail shipments.”

That does not resolve the competitive question. It shows why the useful comparison is not simply “258,000 versus 1%.” The applicants define a program-eligibility pool; BNSF frames that pool against a much broader national traffic measure.

The regulator has not decided whether the remedies are enough

The Surface Transportation Board accepted the revised application for consideration on May 28 but held the proceeding in abeyance and required supplemental information by July 27. The applicants filed that response, including the expanded protections. As of August 10, the STB’s public case-status record still lists FD 36873 in abeyance.

The Board therefore has not approved the $85 billion merger, adopted BNSF’s criticism or determined that the revised remedies preserve or enhance competition. What changed in July is the applicants’ proposed package: more traffic is eligible for CGP, specific service thresholds now underpin a temporary access remedy, and additional facility protections have been offered. Whether those measures satisfy the STB’s major-merger standards remains an unresolved regulatory question.

News on railway transport, industry, and railway technologies from Railway Supply that you might have missed:

Don’t miss…LLC “Kyivguma”: Leading Manufacturer of Rubber Technical Products for Industry and Railway Sector