- The Surface Transportation Board unanimously rejected Union Pacific–Norfolk Southern’s merger application on January 16, 2026 as legally incomplete under 49 C.F.R. part 1180.
- Rail unions led by the Transport Workers Union of America oppose the deal, citing Union Pacific’s safety record and warning of higher risk, job losses, and worse service.
- Shippers, competitors, and bipartisan senators also object on competition grounds, arguing the merger could concentrate market power, raise rates, and disrupt agriculture and supply chains.
- UP and NS claim the merger would create a coast-to-coast railroad with $2.75B in annual synergies and more single-line service, but must refile by mid-2026 for review likely extending into 2027.
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The proposed merger between Union Pacific (UP) and Norfolk Southern (NS), announced via merger agreement on July 28, 2025, aims to form the U.S.’s first coast-to-coast freight railroad, with promised cost savings and service improvements.
Regulatory Review and Rejection. The STB received the notice of intent in July and required UP-NS to submit the full application by January 29, 2026. When the December 19 filing came in (~6,694 pages), the STB unanimously rejected it on January 16, 2026, as incomplete. Key deficiencies cited include missing full system impact analyses (market share projections and traffic volumes), missing contracts or schedules referenced in the merger agreement, and inadequate documentation of competitive and public interest harms and benefits.
Labor and Safety Objections. Unions and worker organizations (TWU, SMART-TD, BLET, BMWED) argue UP has a track record of under-prioritizing safety, including an FRA accusation of interfering with federal safety audits and coaching employees. They warn that a larger merged entity would exacerbate risks and reduce job protections.
Shippers and Competition Concerns. Industry groups—including agricultural and chemical shippers—as well as competing Class I railroads, oppose the transaction, fearing diminished service, higher rates, and weakened competition. Senators on both sides of the aisle have demanded strict enforcement of the STB’s heightened merger rules.
Financials, Synergies & Strategic Implications. UP-NS estimate $2.75 billion in annualized synergies, potential service time savings on certain lanes (24-48 hours on some interline traffic), and broader supply chain benefits by reducing handoffs between carriers.
Timeline & Next Steps. The STB rejected the initial application without prejudice; UP and NS have until February 17, 2026, to submit intent to refile, with a full revised application required by June 22, 2026. If accepted, the review period is projected to run through 2027.
Strategic Risks. Key open questions include whether UP-NS can assemble a revised application that satisfies STB’s rigorous disclosure requirements; whether public concern over safety and competition will overwhelm the potential economic benefits; and whether political pressure (especially from influential legislators and unions) shifts regulatory outcomes.
Supporting Notes
- The STB unanimously found the December 19, 2025 application incomplete per 49 C.F.R. part 1180, citing missing full system impact analyses and omission of schedules/contracts.
- TWU President John Samuelsen asserted “Union Pacific has a shameful safety record … caught by the federal government trying to meddle in a safety audit” and warned the merger would be “catastrophic for … shippers, and the safety of millions.”
- SMART-TD, the largest U.S. rail labor organization, said UP “leads the industry in accidents, incidents, injuries, and fatalities,” and criticized the company’s prioritization of operating metrics over safety.
- BLET and BMWED raised concerns that the deal threatens rail safety, job security, shipping costs, and could reduce service in small towns.
- Senators John Hoeven (R-ND), Amy Klobuchar (D-MN) and others told the STB that UP/NS would control over 40% of U.S. freight rail traffic and could disrupt time-sensitive agricultural shipments if service is interrupted.
- Union Pacific and Norfolk Southern argue the merger will transform around 10,000 interline lanes into single-line service, reducing transfers, delays, and improving efficiency. Their application included support letters from over 2,000 stakeholders and nearly 99% approval from their shareholders.