The U.S. Surface Transportation Board (STB) has formally accepted Union Pacific and Norfolk Southern’s merger application for review, marking the next stage in a proposed deal that would create the first transcontinental freight railroad in the US.
The STB has also requested additional information regarding the amended application, and both rail operators have stated that they will continue working with regulators during the review process.
The merger proposal has already undergone revisions following concerns raised during the regulatory process. Union Pacific and Norfolk Southern submitted an amended application after the STB requested further details on operational integration, competition and service impacts.
The application uses operational and traffic data from all six North American Class I railroads to assess the potential market and operational effects of the merger.
According to the companies, the combined rail network could remove an estimated 2.1 million long-haul truck journeys from U.S. roads each year by shifting more freight transport from road to rail. They also projected annual supply chain savings of around 3.5 billion USD through lower transport and inventory costs.
Arguably, a unified coast-to-coast rail service would improve efficiency for freight customers by reducing interchange delays between separate rail operators.
Union Pacific CEO Jim Vena said:We are confident this merger will deliver more reliable and lower-cost transportation options for American businesses. We submitted a comprehensive, data-driven application backed by a detailed plan for seamless integration. We look forward to the opportunity to show the facts and demonstrate the benefits for our customers, employees and America.
The companies also stated that the merged network would support employment growth, with projections of approximately 1,200 additional union jobs within three years of completion. They reiterated a previously announced commitment that all union employees working for the companies at the time of the merger would retain employment.
However, the merger application has also received widespread objections. An industry coalition named “Stop the Merger” argues that the proposed merger could lead to higher transport costs, reduced service competition and increased risks to supply chains and employment.
The proposal will now enter a merits-based review process led by the STB. Under U.S. law, the regulator has up to 12 months from publication of the application’s acceptance to complete evidentiary proceedings, although the timetable may include requests for supplementary information.
Norfolk Southern President and CEO Mark George said:The time is right for a more competitive U.S. rail network that reduces costs for American shippers and consumers. The added detail strengthened our analysis and enhanced integration planning in our amended application. We have more confidence than ever in the value this proposal will deliver for all stakeholders and look forward to a full and transparent review.
The companies expect the merger process to conclude in mid-2027, subject to regulatory approval.
