3 min read
One Railroad to Rule Them All? Inside the Union Pacific–Norfolk Southern Merger
Kelly Barner : January 29, 2026
Imagine a single railroad company capable of moving freight seamlessly from the ports of Los Angeles to the ports of New York. That vision sits at the center of the proposed merger between Union Pacific (UP) and Norfolk Southern (NS) railroads.
The merger would combine more than 50,000 route miles across 43 states and nearly 100 ports, reshaping how freight moves across the country. Supporters argue the merger could make rail a stronger competitor to long-haul trucking, improving efficiency and lowering costs. Critics say that it would concentrate too much power in an already consolidated industry.
On January 16th, the Surface Transportation Board (STB) unanimously rejected the merger application for being incomplete, but without prejudice. Union Pacific and Norfolk Southern have said they intend to refile.
In this episode, of Art of Supply, I cover why the deal is considered controversial by some, why it is defended by others, and what the next steps in the approval process are.
Union Pacific and Norfolk Southern confirmed in mid-2025 that they were in advanced merger discussions. The proposal would create the first end-to-end transcontinental freight railroad operated by a single company, but the implications extend beyond size.
U.S. railroads do not merely operate trains; they own, build, and maintain their track infrastructure, giving them direct control over routing, access, and investment decisions. Rail currently accounts for roughly 12–13% of U.S. freight movement, meaning consolidation at this scale could materially affect agriculture, energy, manufacturing, and retail supply chains.
The Case For the Merger
Union Pacific and Norfolk Southern have framed the merger as a way to strengthen supply chains, enhance competition, and support long-term economic growth.
According to company materials, the combined railroad would convert approximately 10,000 existing lanes from interline service to single-line service, shift an estimated 2 million truckloads from road to rail, and “protect all union jobs.” Supporters argue that eliminating interchange points would reduce delays, improve reliability, and lower costs.
Cost comparisons underpin much of that argument. The American Action Forum cites data attributed to RSI Logistics showing an average cost per net ton of $214.96 by truck versus $70.27 by rail. Proponents also point to the STB’s approval of the Canadian Pacific–Kansas City Southern merger, which was characterized as an end-to-end combination that reduced interchanges without eliminating head-to-head competition.
If Union Pacific and Norfolk Southern merge, competitors such as BNSF and CSX could feel pressure to pursue their own large-scale combinations, making further consolidation difficult to avoid.
The Case Against the Merger
The Teamsters Rail Conference, representing roughly 20,000 Union Pacific and Norfolk Southern employees, has come out strongly against the deal, citing safety concerns, workforce shortages, and the use of embargoes to mask operational problems.
The Teamsters allege that Union Pacific has relied on excessive embargoes to disguise staffing shortfalls in the face of congestion. The STB itself criticized Union Pacific’s lack of transparency, stating that “rarely has a rail carrier engaged in such delay and obfuscation in response to the Board’s requests for information.”
Competition advocates warn that the merger would further concentrate market power. A Freight Rail Reform issue brief notes that the number of Class I railroads has fallen by roughly 70 percent over the past 40 years, leaving four major railroads controlling about 90 percent of U.S. freight traffic. The brief argues the merger could reduce routing options, weaken shipper leverage, and increase costs.
The American Economic Liberties Project similarly warns that the current system resembles two regional duopolies split by the Mississippi River, and that a Union Pacific–Norfolk Southern merger could trigger a second mega-deal, resulting in a national duopoly. Former Norfolk Southern CEO Wick Moorman is quoted as saying, “A well-executed large railroad merger is an oxymoron… Every rail merger of significant size… has been extremely disruptive for a period of time.”
Federal lawmakers have also weighed in. In November 2025, 18 U.S. senators sent a bipartisan letter urging the STB to conduct a rigorous review, citing risks to agricultural producers, competition, and network fluidity. The senators pointed to the 1996 Union Pacific–Southern Pacific merger, which was linked to worker fatalities, prolonged service disruptions, and an estimated $4 Billion economic impact.
What Comes Next
Under post-2001 “major merger” rules, the STB requires applicants to demonstrate that a merger serves the public interest and enhances (not merely preserves) competition. In January 2026, the Board rejected the Union Pacific-Norfolk Southern application as incomplete, citing missing post-merger market share projections and insufficient market impact analyses.
The rejection was issued “without prejudice,” meaning the companies may refile. Federal law requires incomplete applications to be rejected outright, regardless of the deal’s merits. Any revised filing would trigger a review process that could take nearly 2 years, pushing a final decision into 2027 at the earliest.
This merger is not just about railroads; it is about how much concentration the freight system can absorb without losing resilience. The STB’s action does not kill the deal, but it does raise the bar by signaling that efficiency claims must be demonstrated, not assumed.
In a highly consolidated, infrastructure-heavy system, uncertainty is not a failure of governance. It is a feature, and navigating it is part of the job.