January 8, 2026|Regulatory

UP+NS Merger Application ‘Complete’? (UPDATED 1/8)

Written by Marybeth Luczak, Executive Editor

The Surface Transportation Board (STB) “should reject the efforts of a few parties … to delay and prolong this proceeding by claiming the [recently filed Union Pacific-Norfolk Southern] Application [seeking authorization to combine their networks under common ownership and form a U.S. transcontinental] is incomplete,” the two railroads urged in a Jan. 2 filing.

The approximately 6,700-page control application, including verified statements from 19 company witnesses and independent experts, along with more than 142 gigabytes of supporting workpapers, “demonstrates that the proposed transaction presents an unprecedented opportunity to drive growth, enhance competition, and create a more accessible, sustainable, and lower cost supply chain option that will benefit American businesses and consumers,” UP and NS wrote. “The Application contains all the information required by the Board’s merger rules, 49 C.F.R. part 1180, and presents a prima facie case that the proposed transaction is consistent with the public interest. The Board therefore should accept the Application.”

According to UP and NS, the parties claiming that the application is incomplete are “primarily competitors,” who will “experience increased competition as a result of the merger.” They include BNSF, CN, Canadian Pacific Kansas City, and CSX, plus the National Grain and Feed Association (NGFA), representing one of the railroads’ largest customer bases.

UP and NS noted that the STB “should also disregard the improper efforts of these same parties to litigate the merits of the Application at this time, directly contradicting the Board’s explicit instructions to the contrary. See Decision No. 7 at 1 (‘[C]omments should solely address whether the application is complete . . . .’).”

In their Jan. 2 filing (scroll down to download) that replies to the parties’ comments, UP and NS explained that:

“NGFA’s concerns involve merits not completeness” (see p. 4). NGFA, the railroads said, “advances two principal claims. First, NGFA asserts that the Application is incomplete because the discussion of proposed competitive enhancements does not address all of the potential measures referenced as examples in the Board’s 2001 decision promulgating the current rules for major rail consolidations, including trackage rights, reciprocal switching, eliminating interchange commitments, and establishing shared or joint access areas. Second, NGFA contends that the Application’s Service Assurance Plan is incomplete because it purportedly fails to comply with the merger rules’ requirement for a process to compensate shippers for service failures and provides little information on back-up or contingency plans that would involve other rail carriers. Neither assertion is correct.” The Board’s 2001 decision and rules, UP and NS said, “contemplate that applicants retain discretion to propose a transaction-specific approach (including here the Committed Gateway Pricing program, together with the competitive benefits inherent in the transaction itself) to satisfy the Board’s expectation of a special offering to enhance competition. NGFA may disagree with the sufficiency of Applicants’ offering, but such disagreement concerns the merits of Applicants’ proposals, not whether the Application contains the information required by 49 C.F.R. part 1180. NGFA’s objections to the Service Assurance Plan similarly reflect merits disagreements rather than an absence of required information.”

“The application includes full system impact analyses required by the Board’s rules” (see p. 6). UP and NS told the STB that their “four principal railroad competitors advance a number of baseless claims that the Application fails to provide the full system impact analyses required by 49 C.F.R. § 1180.7(b). Applicants fully complied with the Board’s requirement that they submit full system impact analyses demonstrating the proposed transaction’s impacts on competition within regions of the United States and this nation as a whole … Applicants devoted hundreds of pages of their Application and multiple verified statements, including verified statements from two expert economists, to addressing the proposed transaction’s competitive impacts.” In reference to CN’s comments, UP and NS said their “Application appropriately addresses 3-to-2 and 2-to-1 points” (see p. 7) and “appropriately addresses 2-to-1 shippers” (see p. 9). In reference to CN’s and BNSF’s separate comments, UP and NS said their “Application appropriately addresses actual and projected market shares” (see p. 10). Lastly, in reference to CPKC’s comments, UP and NS said their “Application appropriately addresses geographic competition” (see p. 12) and “downstream effects” (see p. 12).

The application “appropriately addresses downstream effects” (see p. 14). According to UP and NS, “CSX asserts that Applicants were required to submit ‘evidence’ on downstream effects without specifying why the Application’s evidence was insufficient or what additional evidence CSX thinks is required. BNSF says that the Application’s discussion of downstream issues ‘cannot be what the Board had in mind,’ but fails to identify what exactly it believes is required. CPKC similarly does not explain what ‘real downstream analysis’ it believes was needed.” These arguments, UP and NS told the STB, “are misguided,” as they “fully complied with the ‘downstream effects’ provisions of the Board’s rules, which simply ask applicants to ‘initiate a commentary’ about the impact of likely future mergers on the structure of the industry … The Board’s rules make clear that Applicants are not required to present ‘alternative merger benefit calculations based on specific alternative possible responses’ or to ‘forecast the precise actions of their competitors in response to a merger application.’”

UP and NS ‘appropriately enumerated and quantified [the] public benefit the merger would generate” (see p. 16). According to the potential merger partners, “CSX complains that Applicants did not identify ‘which of its claimed benefits are achievable through means “short of merger.”’ However, the Board’s rules do not require Applicants to parse through the benefits calculations to determine whether some fraction of the benefits could be obtained without a merger.” UP and NS said they “abundantly satisfied the Board’s requirement that they address whether the claimed benefits could be achieved short of a merger” through six verified statements.

The application “describes how the merger would enhance competition” (see p. 18). CSX’s and CN’s separate concerns “go to the Applicant’s merits, not its completeness,” UP and NS told the STB. The application, UP and NS said, “contains abundant evidence that the merger will enhance intramodal and intermodal competition,” including how “Committed Gateway Pricing will enhance competition.”

UP and NS “appropriately produced the data underlying their evidence” (see p. 21). The potential merger partners noted that “the Board should reject BNSF’s and CPKC’s claims that its merger rules require applicants to provide all data related to their evidentiary submissions at the most disaggregated level possible. The Board’s rules require applicants to provide the data that they used to produce the evidence they submitted—which in this case is the subset of Transearch data and the modified DAT data provided in Applicants’ workpapers.”

UP and NS “provided a complete impact analysis and operating plan” (see p. 24). The railroads pointed out that the STB’s “rules do not require applicants to use other Class I railroads’ traffic tapes to provide a complete application. To the contrary, the Board’s rules provide that applicants can obtain those traffic tapes only if other Class I railroads first request applicants’ traffic tapes. Even then, applicants are not required to obtain or use those other Class I railroads’ traffic tapes: the Board’s rules state that ‘applicants may require’ railroads to produce their own traffic tapes in exchange for receiving applicants’ tapes” … Here, Applicants used traffic tapes from other Class I railroads that provided them on a timely basis, but they had no obligation to delay the preparation of the Application because other railroads did not promptly produce traffic tapes. Applicants’ use of the Board’s Carload Waybill Sample data for their impact and traffic diversion analyses is fully
consistent with past practice in merger proceedings.”

The application “provides the merger agreement” (see p. 25). “Applicants’ competitors are unhappy because, in responding to discovery requests seeking the disclosure schedules accompanying the merger agreement, Applicants produced the voluminous schedules but redacted one of the schedules to protect privileged material,” UP and NS told the STB. “The schedule at issue addresses the allocation of regulatory risk between UPC [UP] and NSC [NS], and the redacted material does not alter the terms of the underlying transaction. More specifically, the schedule identifies the outer limits of conditions to the merger that UPC is obligated to NSC to accept. Commenting parties’ interest in information is obvious: they would have a tremendous benefit in bargaining for concessions if they knew UPC’s bottom line. However, UPC’s bottom line should have no bearing on either the conditions parties request or those the Board determines are appropriate to impose. The schedule at issue is shielded from discovery by recognized privileges. Commenting parties may disagree with Applicants’ privilege assertions, but such issues can and should be adjudicated through the discovery process. A discovery dispute regarding Applicants’ assertion of privilege is not a basis for rejecting the Application as incomplete.”

The application “appropriately addresses issues regarding applicants’ control of other rail carrier entities” (see p. 27). UP and NS reported, for example, that “CSX contends that the Application is incomplete because it implicitly seeks control of the Norfolk and Portsmouth Belt Line Railroad (‘NPBL’) without filing a separate related control application. As explained more thoroughly in a separate submission on this issue by Norfolk Southern [scroll down to download], CSX is wrong. The Application is forward-looking, seeking authority for Union Pacific to acquire whatever interests Norfolk Southern is legally authorized to hold. The Board has stated that it will issue a decision in Docket No. FD 36836 regarding Norfolk Southern’s application to control NPBL by April 2026. If the Board grants that application, then Norfolk Southern’s control of NPBL will be treated the same as Norfolk Southern’s control of any other carrier subsidiary. If the Board denies the request, then Norfolk Southern will be required to divest sufficient shares so that it does not control NPBL. Either way, no separate related application was required. The two proceedings are unrelated and should proceed separately.”

“Minor map issues do not make the application incomplete” (see p. 30). “CN notes that Applicants’ non-GIS map submitted as Exhibit 1 does not show UP’s overhead trackage rights on NS between Kansas City, Missouri, and Springfield, Illinois, or NS’s haulage rights on UP between Salem, Illinois, and Sidney, Illinois,” UP and NS told the STB. “Applicants regret the omissions and will be filing a corrected Exhibit 1, but the issue does not render the Application incomplete.”

“Workpaper complaints do not make the application incomplete” (see p. 31). “Finally, BNSF vaguely asserts there have been ‘issues receiving and accessing Applicants’ work papers,’” UP and NS reported. “Applicants recognize some—but not all—parties have had difficulties addressing the workpapers because of the size of the files. Applicants also recognize that there might be questions about certain workpapers. This is bound to be the case in a filing the size of the Application. Applicants have been working diligently to answer the questions they have received, and they are committed to promptly addressing and resolving any issues related to workpaper access … The existence of a few issues with such a massive production is not a reason to reject the Application as incomplete.”

The STB is expected rule on the UP-NS application’s completeness by Jan. 16 or Jan. 20, starting the formal evaluation process, or sending UP and NS back to the drawing board to make adjustments and resubmit.

UPDATE, 1/8

UP, via its attorney, on Jan. 7 submitted to the STB a “corrected map,” as promised as part of the Jan. 2 UP-NS “Reply to Comments on Completeness of Application.” It explained that the map (see top, and download below) “shows three sets of rights not shown in the original: (i) Union Pacific’s trackage rights over Norfolk Southern between Kansas City, Missouri, and Springfield, Illinois; (ii) Norfolk Southern’s rights over Union Pacific between Salem, Illinois, and Sidney, Illinois, which consist of haulage rights between Salem and Villa Grove, Illinois, and trackage rights between Villa Grove and Sidney; and (iii) Norfolk Southern’s haulage rights over Union Pacific between St. Louis, Missouri, and Iron Mountain, Missouri, which are restricted to haulage of ballast trains that allow Norfolk Southern to obtain ballast for maintenance of its railroad.”

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For merger resources, visit https://www.stb.gov/resources/major-railroad-mergers/ and https://www.up-nstranscontinental.com/.