The Surface Transportation Board (STB) is inviting public comment on its schedule for reviewing the proposed merger of Union Pacific (UP) and Norfolk Southern (NS), which would create the first U.S. transcontinental railroad, spanning more than 50,000 miles across 43 states. The deadline is Oct. 16, 2025.
The Class I railroads this past summer informed the STB of their intent to file an application seeking authority for UP to acquire NS.
Concurrent with the railroads’ notice of intent, they filed a petition to establish a procedural schedule. “Applicants’ proposed procedural schedule provides for a 390-day period between the date an application is filed and the date on which the Board would serve its final decision on the merits,” STB wrote in its Sept. 24 decision (download below). “Applicants’ proposed schedule includes a longer comment period than the one listed in 49 U.S.C. 11325, extending the due date for written comments to the date that responsive (including inconsistent) applications would be due. Applicants also propose a 90-day period for the filing of responses to comments on the primary application, rebuttals in support of the primary application, responses to protests, requests for conditions, and other opposition, and responses to responsive (including inconsistent) applications. Applicants state that the proposed procedural schedule ‘is in line with those in prior major merger proceedings,’** and provides ample time for comments and the Board’s review.”
According to the STB, “[g]iven the high level of interest in this proceeding, and the potential for numerous and highly complex issues to arise, the Board proposes extending the period to file written comments and providing a corresponding 90-day period to file responses, as Applicants have proposed.” The Board also proposes modifications to Applicants’ proposed schedule: “Specifically, for preliminary comments from the U.S. Department of Justice (DOJ) and U.S. Department of Transportation (DOT), the Board proposes to conform to the time frame set forth in 49 U.S.C. 11325.” Additionally, the STB said its proposed schedule “provides that any necessary public hearing or oral argument would be held on a date to be determined later in the proceeding.”
The STB proposes the following procedural schedule, with “F” designating the filing date of the application, and “F+n” meaning “n” days following that date:
- F: Primary application and any related application(s) filed.
- F+30: STB notice of acceptance of the primary application and any related application(s) to be published in the Federal Register. The Board noted that should it “reject the primary application as incomplete,” it would serve a decision rejecting the application by this date and the remainder of the procedural schedule would be nullified.
- F+45: Notices of intent to participate due.
- F+60: Proposed Safety Integration Plan (SIP) due. Preparation of a SIP is required under 49 CFR 1106.4, according to the STB.
- F+75: Descriptions of anticipated responsive, including inconsistent, applications due. Petitions for waiver or clarification with respect to such applications due.
- F+115: Responsive environmental information and environmental verified statements for responsive, including inconsistent, applicants due.
- F+120: Comments, protests, requests for conditions, and any other evidence and argument in opposition to the primary application or any related application(s) due (except filings from the DOJ and DOT). Responsive, including inconsistent, applications due. F+135 Preliminary comments from DOJ and DOT, if any, due.
- F+150: Notice of acceptance of responsive, including inconsistent, applications, if any, published in the Federal Register.
- F+210: Responses to comments (including those of DOJ and DOT, if any), protests, requests for conditions, and other opposition due. Rebuttal in support of the primary application and any related application(s) due. Responses to responsive, including inconsistent, applications due.
- F+240: Rebuttals in support of responsive, including inconsistent, applications due.
- F+270 Final briefs due. The STB said that it will “provide page limits for final briefs in a later decision after the record has been more fully developed.”
- To Be Determined: Public hearing (if necessary). (Close of the record.)
- To Be Determined: Service date of final decision. The UP-NS proposed schedule includes dates for the issuance of the STB’s final decision and the effectiveness of that decision, according to the Board, which noted that it will “issue its final decision in accordance with 49 U.S.C. 11325(b)(3),” requiring a final decision to be issued within 90 days of the close of the evidentiary record.
** New Merger Rules: Railway Age Capitol Hill Contributing Editor Frank N. Wilner has reported that “Should the now announced UP-NS merger intent advance to a formal merger application before the STB, it will be the first decided under New Merger Rules adopted by the agency in 2001. The CPKC transaction was decided under an exception to those rules owing to KCS’s small size relative to other Class I railroads—the STB in 2001 saying a KCS transaction would ‘not necessarily raise the same concerns and risks as other potential mergers between Class I railroads.’ The New Merger Rules increase applicant burdens to demonstrate the transaction is in the public interest and enhance—not simply preserve—competition. Said the STB in 2001: ‘While further consolidation of the few remaining Class I carriers could result in efficiency gains and improved service, the Board believes additional consolidation in the industry is also likely to result in a number of anticompetitive effects, such as loss of geographic competition, that are increasingly difficult to remedy directly or proportionately. Offering some new or enhanced rail-to-rail competition or other competitive benefits is likely to be necessary to resolve substantial difficulties to tip the balance in favor of the public interest.’ CSX and NS, which in 1998 gained STB approval for joint acquisition of Conrail, later termed the 2001 New Merger Rules ‘apparent antagonism toward mergers.’ Competition enhancements might include constructing choke point bypass routes around Chicago and St. Louis; allowing segment rates where bottlenecks exist; offering reciprocal switching and trackage and traffic rights (the latter permitting freight solicitation); and demonstrating how train speeds will increase and terminal dwell times will improve. Advances in driverless trucks make cost savings and efficiencies from merger-created single-line service essential to improving the railroads’ competitive position, as intermodal growth increasingly is essential to railroad financial health. The New Merger Rules also require an assessment of ‘downstream effects.’ Most obvious are responsive mergers creating an east-west transcontinental duopoly, although such already exists regionally (and in Canada). Also to be provided is a ‘service assurance plan’ to cure unexpected hiccups during the merger transition.” Wilner was a White House appointed chief of staff to Republican STB member Gus Owen when the 1996 UP-Southern Pacific merger was approved. He is author of Railroads & Economic Regulation,” available from Simmons-Boardman Books, 800-228-9670.
Further Reading:
- SMART-TD Supports Proposed UP-NS Merger
- Mr. Vena Goes to Washington
- Kloster, Schultz Chosen for STB by POTUS 47
- Merger Dialogue: Shades of ‘Pride and Prejudice’
- Deal Vs. No Deal
- Mixed Views on Mergers
- NEARS: Consolidation, Weak Economic Backdrop Highlighted
- Transcon Merger Discussion with a Former Class I CEO
- UP+NS: An ‘Absolute Monster of a Railroad’
- UP + NS: What Comes Next?
- Union Pacific + Norfolk Southern: It’s Official
