The Surface Transportation Board is pausing a decision on an $85 billion merger between Union Pacific Railroad and Norfolk Southern Railway.
The federal agency — which regulates the nation’s railroads — announced its unanimous decision May 28 to allow both companies to submit more information, including the merger’s potential effect on competitiveness, by July 27.
Board officials said the railroads provided incomplete information when the application was first submitted and that a revised application didn’t fix the problem.
The revision, submitted April 30, included an environmental review. Public comments about the application are considered in the completeness of the revised application, according to the agency.
“The board finds that there are several aspects of the revised application that are unclear or underdeveloped,” the agency said in a news release. Additional information is required “so that the board (can) thoroughly evaluate — and the public has an adequate opportunity to comment on — whether the transaction is in the public interest,” the agency said in a news release.
The merger, if approved, would create a single-line railroad across the country, linking the East and West coasts.
On May 18, Eric Gehringer, Union Pacific’s executive vice president of operations, told attendees of the 22nd Annual Southwestern Rail Conference that the federal agency was expected to make a decision on the proposed merger by early 2027.
Gehringer said the merger would not create a behemoth railroad company.
“I’m not going to integrate the two railroads right away,” he said at the Hurst event. “We’ll have a plan, it will be well thought out. We’ll have all of the changed management in place and we will make one adjustment after the next in line with safety, in line with service, in line with growth. We’ll make sure those changes, as we make them, demonstrate the outcome that we expected. If we have to adjust, we’ll adjust.”
If the merger is approved, Union Pacific plans to invest $2.1 billion in the following few years, including new technology to improve rail safety, he said.
According to the Stop the Rail Merger Coalition, composed of railroad operators, customers and workers, the merger could drive up costs for manufacturers, farmers and consumers while reducing competition.
Fort Worth-based BNSF Railway, which is opposed to the merger, said it appreciates the action taken by the Surface Transportation Board to protect the integrity of the process and to ensure that stakeholders and the public have clarity about the proposed merger.
“The board’s determination that key elements of the revised application remain unclear or underdeveloped — including issues related to competition, shipper access, service assurance, market impacts, and downstream effects — highlights the significant gaps that still exist,” BNSF officials said in a statement. “Holding the proceeding and environmental review in abeyance until UP and NS provide this supplemental information underscores the seriousness of those deficiencies.”
BNSF officials said they would continue to oppose the merger because it could reduce competition, restrict access for shippers and undermine the efficiency of the country’s rail network.
Eric E. Garcia is senior business reporter at the Fort Worth Report. Contact him at eric.garcia@fortworthreport.org.
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