As had been speculated, Union Pacific and Norfolk Southern on Dec. 19 filed their merger application with the Surface Transportation Board: Union Pacific Corporation—Control—Norfolk Southern Corporation, Docket No. FD 36873. UP and NS entered into their merger agreement on July 29, 2025, in which UP is the acquiring carrier. They described the proposed transaction as an “end-to-end combination [that] will enhance competition and deliver broad public benefits.” The four-volume, 6,700 page application—described as a “Christmas present” by one analyst participating in the mostly scripted announcement webcast (though probably not a gift to anyone required to study it over the Holidays)—“provides comprehensive and compelling new details” as well as “a record-breaking 2,000 letters of support from stakeholders, joining shareholders at both companies who cast votes that were 99% in favor of the merger.” UP and NS expect the transaction to be completed by “early 2027” (February of that year has been suggested). STB went as far as to deploy UP-NS Merger Resources, an area of its website dedicated to the merger application.
The merger, now dubbed “The Great Connection” (a slogan strongly suggestive of a deliberate attempt to appeal to POTUS 47’s frequent use of the word “great” and its variants, i.e., “Make America Great Again,” “I’m the greatest President in history,” etc., etc., etc.) has lofty goals. (Download Executive Summary below). UP and NS claim it will:
- “Connect the United States from coast to coast, transforming 10,000 existing lanes from interline service into faster, more efficient single-line service—eliminating time-consuming handoffs between railroads.
- “Move freight more efficiently, eliminating an estimated 2,400 railcar and container handlings and 60,000 car-miles each day.
- “Retain competitive shipping alternatives for the three customer locations out of more than 20,000 that are served by Union Pacific and Norfolk Southern but no other carrier.
- “Compete more effectively with long-haul trucking, converting an estimated 2 million truckloads of freight from road to rail annually.
- “Protect all union jobs—every employee with a union job at the time of the merger will continue to have one, and growth of the combined company is expected to create about 900 net new union jobs by the third year following the merger.
- “Further enhance competition by voluntarily creating Committed Gateway Pricing (CGP), streamlining pricing of interline moves for thousands of customer locations that otherwise may not directly benefit from the merger.
- “Keep open all existing gateways for eligible traffic on commercially reasonable terms.
- “Provide customers with a unified digital experience, with one accountable partner for their entire rail journey.
- “Invest an estimated $2.1 billion of incremental capital to support revenue and cost synergies, and expect $133 million in annual capital synergies.”
CGP, which may become as common an acronym as PSR, appears to be the strategy to alleviate concerns about reduced rail-to-rail competition. It’s described as “a condition to [STB] approval of the UP/NS merger ‘to improve the prospect that their proposal [will] be found to be in the public interest.’ 49 C.F.R. § 1180.1(d). In adopting its competitive enhancements rule, the Board recognized that ‘the quantity and quality of competitive enhancements that would be required’ would depend on case-specific factors such as ‘any merger-related harm for which feasible and effective remedies could not be devised, the amount of post-merger service disruption that would be likely to occur as a result of a particular transaction, and the amount of public benefits that could truly be expected to flow from a particular transaction.’ … CGP will further enhance competition by extending the competitive benefits of this merger to certain customers who would not otherwise benefit from the merger’s new single-line route.
“In particular, under CGP, customers shipping to or from facilities served solely by BNSF or CSX or facilities on a short line interchanging traffic solely with BNSF or CSX will have access to rates that reflect the benefits of the UP/NS merger for traffic shipped through mid-continent gateways to or from facilities served solely by UP/NS or facilities on a short line interchanging traffic solely with UP/NS. CGP will allow BNSF and CSX to directly market transcontinental service, offering one-stop shopping to customers shipping traffic between facilities they solely serve and facilities served solely by UP/NS when they interchange traffic with UP/NS in Chicago, St. Louis, Memphis and New Orleans, regardless of whether they are the originating or terminating carrier. Under CGP, UP/NS’s revenue requirements for eligible interline movements will be calculated in advance based on rates UP/NS actually used to move similar traffic. BNSF and CSX will be able to use those revenue requirements to rapidly develop independent and confidential origin-to-destination rates in response to requests by customers.”
The application notes that CGP “would remain available through the end of the oversight period imposed on this transaction.” In other words, it’s not perpetual. Volume 1 contains a 94-page Verified Statement from UP General Director of Interline Operations Katherine Novak. We’ve extracted it from the application:
The comprehensive joint Operating Plan “encompasses three major functional areas: transportation, mechanical, and engineering,” according to the application’s 229-page Verified Statement from NS Executive Vice President and Chief Operating Officer John F. Orr (Railway Age’s 2026 Railroader of the Year) and UP Executive Vice President Operations Eric Gehringer. ”In each area, the Operating Plan shows how UP and NS will integrate activities, personnel and facilities following consummation of the proposed transaction; the operational changes expected to result; and the gains in safety, service, operating efficiencies and other benefits anticipated from the merger. The Operating Plan specifically addresses the effects of integration on patterns of service, yard activity, commuter and passenger services, equipment requirements and utilization, traffic density, and labor forces. We’ve extracted it from Volume 2 of the application:
“We look forward to working with the Surface Transportation Board as it reviews our historic application to create America’s first transcontinental railroad,” said Union Pacific CEO Jim Vena. “As time and technology continue to transform how freight is delivered, our industry must keep pace and move forward, reaching underserved markets with new rail solutions and strengthening the U.S. supply chain. Customers deserve stronger, more connected freight rail, and our merger will make that happen.”
“This combination will bring together Union Pacific’s expansive Western reach and Norfolk Southern’s unparalleled access to Eastern manufacturing and population centers in an end-to-end combination,” said Norfolk Southern President and CEO Mark George. “It will create a cohesive freight rail solution with 50,000 route miles that connect 43 states and more than 100 ports.”
STB Needs “Completeness” Comments—Rapidly
The Surface Transportation Board said that comments on the completeness of the merger application are due by Monday, Dec. 29, 2025. “As discussed in the Board’s Aug. 28, 2025 notice of receipt of the Applicants’ prefiling notification, the proposed transaction is classified as a major transaction under the Board’s regulations at 49 C.F.R. 1180.2(a),” STB said. ”An application for a major transaction must include substantial supporting information, detailed in the Board’s regulations at 49 C.F.R. part 1180.
“Today’s decision invites public comments, which should solely address the completeness of the application—whether the application contains the information required in 49 C.F.R. part 1180. The Applicants may file a reply to those comments by Friday, Jan. 2, 2026 at noon EST. Comments on the merits of the proposed transaction will be sought at a later stage of the proceeding, should the Board accept the application.
“Following this comment and reply period, the Board will make a determination on the completeness of the application, either accepting the application as complete or rejecting it as incomplete. This determination should not be mistaken for a determination on the merits of the proposed transaction. Should the Board accept the application for consideration, it will issue a procedural schedule for comments on the merits of the proposed transaction.”
BNSF, CPKC, CN Respond
BNSF and CPKC, which from the get-go have been rather vocal about, respectively, their opposition to or deep concern about the merger, immediately released statements.
“While we are still reviewing the STB filing and will have more to say soon, what we have seen so far does not change BNSF’s opposition to the proposed merger,” said BNSF President and CEO Katie Farmer. “The transaction poses a significant threat to the U.S. economy and the American consumer through its long-term competitive harms. It would leave shippers with fewer options—driving higher rates and ultimately higher prices for consumers. This didn’t begin with customers asking for this merger, and the claimed public benefits appear to accrue primarily to shareholders. Past mergers demonstrate the risk of serious service failures with destructive impacts to customers, the U.S. rail network and the American economy.
“This is precisely why the STB strengthened its merger rules: Applicants must now prove their deal will not only preserve but enhance competition; that it serves the public interest, and its purported benefits can’t be delivered through partnerships. BNSF is confident that UP has not met these requirements. UP has a long history of making promises in past mergers that they back away from once they’ve secured approval. BNSF remains focused on achieving these same benefits through partnership and collaboration which results in streamlined service, and greater operational flexibility—delivering real, immediate benefits to customers.”
BNSF issued a UP-NS Opposition Summary:
CPKC, while not overtly opposing the merger, said it will thoroughly examine the application “from at least two perspectives: whether it complies with the Board’s 2001 Major Merger Rules and provides the STB and interested parties an adequate basis for evaluating the public interest consequences of the UP-NS proposal; and whether the UP-NS proposal is consistent with the public interest.”
“The first step in the STB’s merger review process calls for the STB to determine, by Jan. 18, 2026, whether to accept the application for consideration or to reject it as incomplete,” CPKC explained. “If the STB accepts the application, its public interest review will entail consideration of a broad and novel array of public interest concerns. Approval of this merger is not inevitable. The proposed UP-NS merger, unprecedented in scale and scope, would radically and permanently change the U.S. rail network. If approved, the merger would pose extraordinary and far-reaching risks to customers, rail employees and broader supply chains. We are confident the STB will conduct a vigorous process to assess all the short- and long-term public interest impacts of the proposed behemoth, including on the competition rail customers have today.
“CPKC will remain an active participant in that process. We encourage all interested shippers, receivers, associations, governments and other stakeholders to closely examine the application and file their own comments with the STB. All stakeholders should express their views about how this proposed merger would affect their business, including new limitations on their rail shipping options, new risks of rate pressures, and new risks to service quality. CPKC anticipates submitting comments to the STB in accordance with the procedural schedule the STB adopts in this proceeding.”
CN’s statement was brief and highly critical: “The application filed this morning by Union Pacific and Norfolk Southern fails to demonstrate that the merger would enhance competition or generate significant public benefits that would require a merger. It falls well below both the 2001 and old merger rules set out by the STB. Protecting competition is not optional. It is essential to keep costs down and the economy sound. The fact is that this merger would reduce rail transportation options for customers while creating a single entity that controls more than 40% of the U.S. freight rail market. Without real railroad competition, prices go up and consumers lose. CN will be actively participating in the STB process and encourages all stakeholders to participate to ensure all voices are heard and that competition is enhanced.”
