UP-NS Merger Application Rejected as Incomplete

Dear Customers,

Last Friday, the Surface Transportation Board (STB) voted unanimously to reject the Union Pacific-Norfolk Southern (UP-NS) merger application, deeming it incomplete. In its decision, the STB emphasized UP and NS must comply with all of the Board’s regulatory requirements and provide data that backs up what they have been telling stakeholders the merger will accomplish. Complying with the Board’s requirements is especially important given the significant implications for the health, competitiveness and long-term resilience of the nation’s rail network from a potential merger this size.

The proposed UP-NS transaction is three times larger than the biggest merger in our industry’s history and would be the largest U.S. merger of any kind since 2019. It would also touch five times more American freight than the recent CPKC merger. Rightfully so, the STB stated this proposal warrants greater scrutiny.
 
One of the primary grounds for the UP-NS application’s rejection aligns with concerns we have raised consistently. The merger application was lacking information critical to determining the proposed merger’s impact on competition. Importantly, the Board stated that the missing market-share projections were necessary because even end-to-end combinations entail a risk that the merged carrier would acquire and exploit increased market power. The Board will now require applicants to submit that more fulsome projected market share data as part of any revised application.

As far as next steps, the UP and NS may refile a revised merger application at any time before June 22, however, they must notify the STB by February 17 if they intend to do so. Any new filing will initiate a second completeness review by the STB, and a procedural schedule will only be set after that review is concluded. While that means a formal deadline for submitting participation notices has not yet been set, the Board continues to welcome both participation notices and written comments regarding the potential impacts of the proposed merger. Filing instructions can be found on our website.

BNSF remains steadfast in our belief that competition drives innovation, service quality and continued investment. When competition diminishes, rail customers lose options and accountability suffers.

Thank you for your continued engagement and collaboration as we work together to protect a competitive rail network. Additional information and analysis on the proposed UP-NS merger are available on our website. We will continue to keep you updated as new developments occur. 

Sincerely,
 
Tom G. Williams
Executive Vice President & Chief Marketing Officer