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Too big to merge? Union Pacific and Norfolk Southern Try Again
Kelly Barner : June 11, 2026
In December of 2025, Union Pacific and Norfolk Southern submitted an application to merge.
The Surface Transportation Board, a Federal agency with oversight responsibility for rail mergers, rejected it on January 16th, saying it was incomplete and lacked in-depth detail.
They also pointed out that the companies had not met expectations for showing how they would enhance rail competition. This is the first merger that must meet the requirements of a 2001 Surface Transportation Board rule to enhance competition - a tall order to be sure.
Union Pacific and Norfolk Southern took that feedback in stride and submitted an updated application on April 30th. It was “conditionally accepted” on May 28th, but that is not the same as being approved.
The STB has asked for more information. Among its specific asks are insight on merged market share, effects of the merger on passenger rail, competitive pressures, and train car supplies. They are also questioning the fact that Union Pacific and Norfolk Southern seem to have assumed that the other railroads (not to mention the trucking companies) will not change anything in response to their merger.
Estimated $3.5 Billion in Savings
If approved, this $85 Billion deal would create a combined enterprise worth more than $250 Billion. The combined company would be named the Union Pacific Transcontinental Railroad: the first transcontinental freight railroad.
The revised merger application’s acceptance caused a $12 Million selloff of the two railroads. Shares of Union Pacific fell 4.2 percent, and those of Norfolk dropped 5.4 percent.
The STB has given them until July 27th to submit more information, and the review has been paused until all information is submitted, including an environmental review. If given, the approval could easily be pushed to the late fall of 2027.
According to Union Pacific, the analysis in their updated merger application is the first ever to use actual traffic data rather than using sample data provided by the STB. They estimate that shippers will save an estimated $3.5 Billion annual by shifting freight from trucks to rail, and they predict that the growth from the combined railroad will create more union jobs.
The Opposition
Union Pacific and Norfolk Southern workers are represented by several unions, the Teamsters being the largest: the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Teamsters Rail Conference.
The unions aren’t so sure this merger is a great idea. In fact, they are part of the Stop the Rail Merger Coalition. This group includes several shipper associations, the Teamsters Rail Conference, and competitors like Canadian Pacific Kansas City (CPKC) and BNSF Railway.
Union Pacific and Norfolk Southern have “offer(ed) cosmetic changes to gloss over the serious and fundamental competition, pricing, and service concerns that were previously raised.”
BNSF also thinks the companies have “exaggerated” their estimates for truck-to-rail diversions, which is a key part of this story from an overall supply chain perspective: the tension between trucks and rail freight.
Rail v. Truck
Trucks transported 12 billion tons of freight in 2019. That represents two thirds of total domestic freight volume: ten times the freight transported by rail. 52 percent of the freight that travels by rail today is bulk commodities, while the other 48 percent is intermodal.
Even the merging companies recognize the tension between rail and truck.
Norfolk Southern President and CEO Mark George said the following on April 14th at the American Short Line and Regional Railroad Association’s annual meeting in Minneapolis:
“When you look at what’s gone on over time, we have lost market share to the highway as an industry. Shippers have built out truck pads and started to shift more of their volume to the highway.”
Their proposed merger with Union Pacific will certainly help rail claw back some of that market share, but will it affect as much as they think?
Bottom Line
The Union Pacific - Norfolk Southern merger hinges on the requirement that the merger will increase competition in rail, not just preserve the status quo. That has very little to do with why anyone would merge, so I think they are fighting an uphill battle.
The Surface Transportation Board has accepted the application, but they remain skeptical. They have asked for more information, but won’t review anything until the next round of information is provided in late July.
This is a test case for whether a mega merger can be approved by arguing that it will make rail more competitive against trucking while simultaneously concentrating power within the rail industry.
As of right now, we probably won’t get any updates until early August… so we’ll see if the merger proceeds on schedule or if the Stop the Rail Merger Coalition gets its way.