UP–Norfolk Southern Seek OK for Coast-to-Coast Rail

December 19, 2025 at 19:39 UTC

5 min read

Union Pacific and Norfolk Southern trains merge, visualizing $72B rail merger proposal

Key Points

Union Pacific and Norfolk Southern have filed a nearly 7,000-page merger application with the U.S. Surface Transportation Board.
The proposed US$72–85 billion deal would create America’s first transcontinental freight railroad with 50,000 route miles in 43 states.
Supporters cite faster single-line service, up to 2 million fewer truckloads on U.S. roads annually, and protections for all union jobs.
BNSF and shipper and labor groups warn of reduced competition, higher rates, and potential service disruptions if the merger proceeds.

Historic STB filing for first U.S. transcontinental railroad

Union Pacific Corp. and Norfolk Southern Corp. on Dec. 19 submitted a nearly 7,000-page application to the U.S. Surface Transportation Board (STB) seeking approval to merge and create what they describe as America’s first transcontinental freight railroad. The proposed cash-and-stock transaction, valued in various reports at between US$72 billion and US$85 billion, would combine Union Pacific’s 23-state western network with Norfolk Southern’s 22-state eastern system. The merged railroad would span about 50,000 route miles across 43 states and connect to more than 100 ports, with the companies targeting an early 2027 closing, subject to STB review and conditions. The STB has begun a 30-day completeness review before launching a formal evaluation that could take a year or longer.

Railroads pitch efficiency, trucking competition and public benefits

Union Pacific CEO Jim Vena and Norfolk Southern CEO Mark George describe the deal as a classic end-to-end merger linking complementary territories rather than overlapping routes. They argue that converting roughly 10,000 existing interline lanes into single-line service would eliminate time-consuming handoffs between carriers, cutting an estimated 2,400 daily rail car and container handlings and 60,000 car-miles. The companies say faster, more reliable service would allow freight to bypass congested hubs such as Chicago and St. Louis and open 84,000 new county-to-county lanes where shippers currently rely on trucks. They project the combined network would shift about 2 million truckloads a year from road to rail, including about 350 fewer trucks per day in the greater Chicago area, easing highway congestion, reducing wear on public roads, and lowering emissions. The application highlights benefits for an Upper Midwest “watershed” region that has relied heavily on trucking, citing consultant Oliver Wyman’s estimate that 105,000 carloads of merchandise could move from road to rail once single-line service is available.

Customer, labor, safety and capital commitments

The railroads’ filing outlines a series of commitments aimed at customers, employees and communities. For shippers, the companies promise to keep all existing gateways open on commercially reasonable terms and to retain competitive alternatives for the three customer locations, out of more than 20,000, that both carriers currently serve exclusively. They propose Committed Gateway Pricing to streamline pricing for interline moves and a voluntary alternative dispute resolution program for merger-related service issues. Planned service enhancements include two new daily intermodal train pairs linking Southern California with the Ohio Valley, Northeast and Southeast, with estimated transit time reductions of up to 20 hours and more than two days on some lanes, plus six new manifest trains and six premium intermodal lanes operating seven days a week. On labor, the companies pledge that every employee with a union job at closing will retain a job, with any efficiencies achieved through attrition rather than layoffs, and forecast about 900 net new union positions by year three. They also cite a joint safety integration plan developed with the Federal Railroad Administration, recent improvements in injury and accident rates at both railroads, and an estimated US$2.1 billion in incremental capital spending to integrate the systems and realize about US$133 million in annual capital synergies.

Strong backing from investors, but mounting competitive pushback

Union Pacific and Norfolk Southern report what they call record stakeholder support, including about 2,000 letters filed with the STB and shareholder votes at both companies that were 99% in favor of the merger. They frame the combination as necessary to counter long-haul trucking, noting government data that show rail’s market share declined nearly 10% between 2014 and 2023. However, the proposal faces significant opposition. Trade groups representing chemical and energy shippers, unions for locomotive engineers and track workers, and rival carrier BNSF Railway have all raised concerns. BNSF President and CEO Katie Farmer said the transaction poses a “significant threat” to the U.S. economy and consumers by reducing shipper options, increasing rates and risking service failures similar to those seen after past rail mergers. She argued that the claimed public benefits largely accrue to shareholders and asserted that Union Pacific has not met the STB’s strengthened merger standards, which require deals to enhance competition and serve the public interest in ways that cannot be achieved through partnerships. BNSF has reiterated that it intends to pursue service improvements through collaboration rather than consolidation.

Key Takeaways

The UP–Norfolk Southern plan is framed as an end-to-end merger that would reconfigure U.S. freight flows by replacing many interline moves with single-line service.
Supporters emphasize modal shift from trucks to rail, job protections and new service lanes, while critics focus on potential loss of shipper choice and pricing power concerns.
The STB’s tougher merger standards and the scale of the proposed coast-to-coast network suggest a lengthy, closely scrutinized review before any 2027 closing is possible.