The Surface Transportation Board (STB) accepted Union Pacific and Norfolk Southern's revised merger application for review on May 28, 2026, but held the proceeding in abeyance and requested additional information from the parties. The STB's information request covers competition analysis, public interest, service continuity, terminal railroad structures, market share projections, potential downstream merger effects, and passenger railroad impacts. The additional information deadline is July 27, 2026.

In a significant development in the regulatory proceeding, Union Pacific and Norfolk Southern have signaled to the STB their readiness to divest interests in jointly-owned railroad structures to address competitive concerns. According to Reuters, the structures under consideration include Terminal Railroad Association of St. Louis, Kansas City Terminal Railway, and TTX Company — shared-ownership entities that provide terminal switching, interchange, and equipment services at key nodes in the U.S. freight network.

The proposed merger between Union Pacific (UP) and Norfolk Southern (NS) would combine the largest western U.S. Class I freight railroad with one of the two major eastern Class I freight railroads. The transaction is valued at approximately $85 billion and, if approved, would create the first coast-to-coast freight railroad in the United States — a single-line operator capable of moving freight from Pacific ports to Atlantic ports without interchange.

Stated benefits. The parties have presented the following projected benefits to the STB:

• Approximately $3.5 billion in annual shipper savings from reduced transit times, eliminated interchange delays, and improved network efficiency
• Diversion of approximately 2.1 million truckloads from highway to rail, with associated environmental and infrastructure benefits
• Reduced congestion at major rail interchange hubs, particularly Chicago — the largest rail hub in North America, where interchange delays between eastern and western railroads add days to transcontinental freight movements
• Improved single-line service for shippers currently requiring interchange between UP and NS networks

The STB applies a distinct and demanding regulatory framework to major rail mergers — one that is materially different from the standard antitrust review conducted by the DOJ or FTC for mergers in other industries.

Public Interest Standard

Under the Interstate Commerce Commission Termination Act (ICCTA), the STB must find that a proposed merger is consistent with the public interest before it can approve the transaction. This standard requires the STB to weigh a broad range of factors, including:

• The effect on competition among rail carriers
• The effect on the quality of transportation service
• The effect on the environment
• The effect on employees
• The effect on communities served by the railroads
• The financial condition of the carriers

The public interest standard gives the STB broad discretion to impose conditions, require divestitures, and mandate service commitments as a condition of approval — even if the transaction would otherwise satisfy antitrust standards.

Enhanced Scrutiny for End-to-End Mergers

The STB's merger rules distinguish between "end-to-end" mergers (combining railroads with complementary, non-overlapping networks) and "parallel" mergers (combining railroads with overlapping routes). The UP–NS transaction is primarily an end-to-end merger — UP's western network and NS's eastern network are largely complementary rather than directly competitive.

However, the STB's rules impose enhanced scrutiny on major mergers that could affect the structure of the national rail network. The STB must assess not only the direct competitive effects of the proposed merger but also the potential for the merger to trigger subsequent consolidation — a "next merger" effect that could further reduce competition in the freight rail industry.

The STB's Information Request: Key Areas

The STB's decision to hold the proceeding in abeyance and request additional information signals that the Board has identified specific areas requiring further analysis before it can proceed with a full environmental and public interest review. The STB's information request covers:

Competition analysis — 2-to-1 and 3-to-2 reductions. The STB has specifically requested analysis of markets where the merger would reduce shipper options from two carriers to one (2-to-1) or from three carriers to two (3-to-2). These are the markets where competitive harm is most direct and where the STB is most likely to require remedies.

Public interest. The STB has requested additional public interest analysis, including the effect on shippers, communities, employees, and the national transportation system.

Service assurance plan. Major rail mergers have historically caused significant service disruptions during integration. The STB has requested a detailed service assurance plan — a commitment by the merged railroad to maintain service levels during the integration period, with specific metrics and accountability mechanisms.

Terminal railroads. The STB has requested information on the parties' interests in jointly-owned terminal railroads — including Terminal Railroad Association of St. Louis, Kansas City Terminal Railway, and TTX Company — and the competitive implications of those interests post-merger.

Market share projections. The STB has requested detailed market share projections for freight corridors and commodity markets affected by the merger.

Downstream merger effects. The STB has requested analysis of the potential for the UP–NS merger to trigger subsequent consolidation among the remaining Class I railroads — specifically, whether a combined UP–NS would create competitive pressure on BNSF (the other major western railroad) and CSX (the other major eastern railroad) to pursue their own merger.

Passenger railroad effects. NS hosts significant Amtrak passenger service on its network. The STB has requested analysis of the effect of the merger on Amtrak operations, on-time performance, and access to NS-owned infrastructure.

The parties' signaled readiness to divest interests in jointly-owned terminal structures is a significant development in the regulatory proceeding. Terminal railroads — switching railroads that provide access to terminal facilities, interchange tracks, and industrial spurs in major rail hubs — are critical infrastructure for the freight rail network.

Terminal Railroad Association of St. Louis (TRRA). TRRA is a jointly-owned terminal railroad serving the St. Louis rail hub, one of the largest rail interchange points in the United States. UP and NS are among TRRA's owners. A combined UP–NS owning a controlling interest in TRRA could raise concerns about access for competing railroads — particularly BNSF and CSX — to St. Louis terminal facilities.

Kansas City Terminal Railway (KCT). KCT is a jointly-owned terminal railroad serving the Kansas City rail hub. Kansas City is one of the most important rail interchange points in the United States, and KCT provides switching and terminal services for multiple Class I railroads. A combined UP–NS with a controlling interest in KCT could affect competitive access to Kansas City terminal facilities.

TTX Company. TTX is a jointly-owned railcar pooling company that provides flatcars and other equipment to Class I railroads on a shared basis. TTX's pooling arrangement reduces equipment costs for all participating railroads. A combined UP–NS with a controlling interest in TTX could raise concerns about preferential access to equipment or discriminatory pricing for competing railroads.

The parties' willingness to divest these interests suggests they anticipate that the STB will require structural remedies in these areas as a condition of approval. The specific form of any divestiture — sale to an independent operator, transfer to a neutral trustee, or open-access requirements — will be a key negotiating point in the regulatory proceeding.

Major rail mergers are subject to environmental review under the National Environmental Policy Act (NEPA). The STB serves as the lead federal agency for NEPA review of rail mergers. The NEPA process for a transaction of this scale will likely require a full Environmental Impact Statement (EIS), which can take 18–24 months to complete.

The NEPA review will assess the environmental effects of increased rail traffic on the merged network — including noise, vibration, air quality, hazardous materials transport, and effects on communities along rail corridors. The EIS process includes public comment periods and can generate significant litigation risk from environmental groups and affected communities.

Rail mergers are subject to the labor protection requirements of the ICCTA, which require the merged railroad to provide specified protections for employees of the predecessor railroads — including job security, relocation assistance, and income protection for employees displaced by the merger. The specific labor conditions imposed by the STB will be a significant cost item for the merged railroad.

The major rail unions — including the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Transportation Communications Union (TCU) — will be active participants in the STB proceeding and will advocate for strong labor protections as a condition of approval.

The STB's decision to hold the proceeding in abeyance and request additional information extends the regulatory timeline and increases break-up risk. The merger agreement will include a termination right if the STB has not approved the transaction by a specified outside date, and the parties will need to assess whether to extend the outside date if the regulatory process takes longer than anticipated.

The STB's approval is the critical path item for closing. HSR antitrust review — while required — is expected to be less problematic than STB review given the end-to-end nature of the merger. The parties will also need to address any state regulatory approvals required for the transfer of railroad operating rights in specific states.

Turkish logistics companies with U.S. operations. Turkish logistics companies operating in the U.S. market — or evaluating U.S. market entry — should monitor the UP–NS proceeding closely. If approved, the merger would fundamentally change the structure of the U.S. freight rail network, with significant implications for intermodal logistics, port connectivity, and transcontinental freight routing.

Port and intermodal connectivity. A coast-to-coast UP–NS network would offer single-line service between Pacific ports (Los Angeles, Long Beach, Seattle, Portland) and Atlantic ports (Norfolk, Baltimore, New York/New Jersey, Savannah). Turkish exporters shipping goods to the U.S. market — and Turkish importers sourcing from Asia — should assess how a merged UP–NS network would affect their U.S. distribution and logistics arrangements.

Investment in U.S. rail and logistics infrastructure. Turkish investors evaluating U.S. rail, intermodal, and logistics infrastructure investments should incorporate the UP–NS proceeding into their analysis. The merger, if approved, would create a dominant coast-to-coast operator with significant market power — affecting the competitive dynamics for short-line railroads, intermodal terminals, and logistics service providers that depend on Class I railroad access.

M&A due diligence framework. The UP–NS proceeding illustrates the complexity of the STB's public interest review framework for major rail mergers — a framework that is materially different from standard antitrust review and that gives the STB broad authority to impose conditions, require divestitures, and mandate service commitments. Investors evaluating U.S. rail assets should understand this regulatory framework as a fundamental feature of the sector.

ULF New York advises Turkish companies and investors on U.S. transportation law, logistics transactions, and cross-border infrastructure investments.