Union Pacific and Norfolk Southern resubmit merger bid to Surface Transportation Board
The rail giants argue the deal will create the first all-freight transcontinental line, cut transit times, and generate 1,200 new union jobs by the third year.
Union Pacific and Norfolk Southern have submitted an amended merger application to the Surface Transportation Board, seeking approval for what they describe as the first all-freight transcontinental railroad in the United States. The revised filing, lodged on Thursday, aims to overcome the regulator's rejection of the initial proposal in January, which was deemed incomplete due to missing market share forecasts and operational details.
The companies have addressed the specific deficiencies highlighted by the STB by incorporating comprehensive traffic data from all six North American Class I railroads. This approach marks the first time such extensive data has been utilised in a rail merger assessment, allowing for a more thorough evaluation of market and operational impacts. The application also now includes specific terms regarding the withdrawal of the deal and details on the sale of the Terminal Railroad Association of St. Louis.
Central to the proposal is the creation of a single-line service across the Mississippi watershed, designed to reduce the number of freight handoffs and streamline logistics. The railroads project that this enhanced connectivity will lower shipper costs by an estimated $3.5 billion annually, with the savings expected to flow through to consumer prices. Furthermore, the combined network is forecast to reduce transit times by between 24 and 48 hours compared to the current fragmented system.
Operational adjustments in the revised filing reflect an improving trucking market characterised by rising rates, which has historically encouraged shippers to shift towards intermodal rail. Consequently, the partners have increased their projections for winning highway freight from 2 million to 2.1 million truckloads each year. The application also highlights the addition of a new coast-to-coast intermodal lane connecting northern California and the Southeast, increasing the total number of premium seven-day-a-week lanes from six to seven.
Regarding employment, the application forecasts the creation of 1,200 net new union jobs by the third year of the merger, an increase from the original projection of 900. This figure is in addition to a separate "jobs-for-life" guarantee covering existing union employees at the time of the merger. Union Pacific CEO Jim Vena and Norfolk Southern President Mark George have maintained that the deal will enhance competition and strengthen the U.S. supply chain, noting that the combined entity will move a ton-mile volume similar to its western competitor, BNSF.
The Surface Transportation Board, under Chairman Patrick Fuchs, previously scrutinised the initial application heavily, gathering over 100 million data points and consulting specialists from the Massachusetts Institute of Technology. While the revised filing provides the requested market share forecasts and operational details, the rigorous review process indicates that significant scrutiny remains ahead for the proposed consolidation.
