Major infrastructure projects deserve careful review. They also deserve to be judged on the facts, not on outdated objections and hypothetical concerns.
The $71 billion Union Pacific-Norfolk Southern merger is ready to be assessed on its merits and approved.
When the companies first filed their application with the Surface Transportation Board, critics questioned whether the merger would preserve competition, protect customers during integration, and deliver the public benefits it promised. Those were reasonable questions for regulators to ask. The STB’s job is to ensure that large transportation mergers in the rail industry serve the public interest, not merely corporate balance sheets.
Over the past year, however, the applicants have addressed those concerns head-on. Their July 27 supplemental filing is the clearest example yet. Rather than simply defending the original proposal, Union Pacific and Norfolk Southern voluntarily offered a series of concrete commitments that exceed those made in any previous major U.S. rail merger.
The most significant additions involve four enforceable customer protections.
First, the companies nearly doubled the number of shipments eligible under their Committed Gateway Pricing program, increasing annual coverage from roughly 134,000 shipments to approximately 258,000. The expanded program now includes bulk unit trains, extending protections to agricultural producers and other large-volume shippers while broadening competitive pricing opportunities across the network.
Second, the applicants addressed one of the central competitive concerns surrounding the transaction. Out of more than 20,000 customer locations on the combined network, fewer than 40 would experience any reduction in the number of available Class I railroads. For every one of those facilities, the companies have committed to preserving access to another Class I carrier wherever legally possible — a level of systemwide protection with no real precedent in previous rail mergers.
Third, the filing establishes what the companies have referred to as a Targeted Access Program. If service deteriorates below defined performance thresholds during integration, affected customers can obtain expedited access to alternative rail service. Instead of asking regulators and customers to simply trust the integration process, the applicants have built in an enforceable safety valve.
Finally, the companies proposed a new Rate Alternative Dispute Resolution process that gives the STB expedited authority to intervene if the public benefits promised in the merger application fail to materialize.
These are not vague aspirations. They are measurable commitments subject to regulatory oversight, and they reinforce why this transaction differs from mergers that eliminate direct competitors.
Union Pacific and Norfolk Southern largely operate in different parts of the country. Union Pacific serves the western United States, while Norfolk Southern operates primarily in the East. The recently announced agreement between Union Pacific and Canadian National addresses the limited areas where the Union Pacific and Norfolk Southern networks overlap, enhancing competition by giving customers access to Canadian National service in those areas.
The merging railroads estimate they will save shippers approximately $3.5 billion annually by operating as a single company. About 10,000 existing interline routes would become single-line service, while roughly 88,000 entirely new county-to-county single-line lanes would become available. The proposal also adds new intermodal and manifest service options while improving transit times across existing corridors.
Competition would hardly disappear. Following the merger, the eastern U.S. would continue to be served by the combined Union Pacific-Norfolk Southern system and CSX. The western U.S. would continue to have the combined carrier and BNSF. Canadian National and Canadian Pacific Kansas City would continue operating transcontinental networks that connect Canada, the U.S., and Mexico.
Meanwhile, rail’s largest competitor remains trucking, which moves more than 70% of domestic freight. Rail already offers significant cost advantages on long-haul shipments but often loses freight because no seamless coast-to-coast single-line service exists today. According to the merger application, the transaction could shift more than 2 million truckloads annually from highways to rail, easing highway congestion while improving freight efficiency.
Recent history provides useful context. The STB approved the Canadian Pacific-Kansas City Southern merger in 2023 because the combination created new single-line service rather than eliminating direct competition. The market responded exactly as competitive markets should: rival railroads adjusted their own strategies instead of disappearing. The broader lesson is straightforward: Competition doesn’t disappear after major infrastructure investments. It evolves.
Not everyone benefits equally when businesses streamline. Competing railroads earn revenue every time freight changes hands at an interchange, and certain commercial arrangements have developed around today’s fragmented network. But protecting incumbent business models is not the purpose of merger review. It’s to protect competition and consumers.
The rail merger clears that bar. It combines substantial private investment, enforceable customer protections, expanded competitive access, and meaningful efficiency gains into a package that directly addresses many of the concerns raised during the STB’s review.
HOW A COAST-TO-COAST RAILROAD COULD CHANGE AMERICAN LIVES
America has long prospered by allowing infrastructure to evolve alongside the economy it serves. Railroads themselves transformed commerce by connecting markets that had previously been separated by geography.
The Surface Transportation Board should evaluate this transaction using the same standard it applies to every major merger: whether the public benefits outweigh the competitive risks. Based on the record, the case for approving the merger is even stronger than when it was first announced.
Michael Toth is the director of research at the Civitas Institute at the University of Texas.