Union Pacific, Norfolk Southern file merger application with STB

Union Pacific Corp. and Norfolk Southern Corp. today filed an application with the Surface Transportation Board (STB) requesting approval to combine the two railroads.

The companies entered into a merger agreement on July 29 to create the first U.S. transcontinental railroad. The nearly 7,000-page application provides comprehensive new details on how the combination will enhance competition and deliver public benefits. The application includes 2,000 letters of support from stakeholders, joining shareholders at both companies who cast votes that were 99% in favor of the merger, UP and NS officials said in a press release.

The STB has added a new section to its website where people can view UP-NS merger-related information as the board's review process moves forward.

“We look forward to working with the Surface Transportation Board as it reviews our historic application to create America’s first transcontinental railroad,” said UP CEO Jim Vena. “As time and technology continue to transform how freight is delivered, our industry must keep pace and move forward, reaching underserved markets with new rail solutions and strengthening the U.S. supply chain. Customers deserve stronger, more connected freight rail, and our merger will make that happen.”

The companies said that if their proposal is approved by the STB, the combined railroad will:

• transform 10,000 existing lanes from interline service into faster, more efficient single-line service and eliminate time-consuming handoffs between railroads;

• move freight more efficiently, eliminating an estimated 2,400 rail car and container handlings and 60,000 car-miles each day;

• retain competitive shipping alternatives for the three customer locations out of more than 20,000 that are served by UP and NS but no other carrier;

• compete more effectively with long-haul trucking, converting an estimated 2 million truckloads of freight from road to rail annually;

• protect all union jobs: Every employee with a union job at the time of the merger will continue to have one, and growth of the combined company is expected to create about 900 net new union jobs by the third year following the merger; 

• enhance competition by voluntarily streamlining pricing of interline moves for thousands of customer locations that otherwise may not directly benefit from the merger;

• keep open all existing gateways for eligible traffic on commercially reasonable terms; 

• provide customers with a unified digital experience, with one accountable partner for their entire rail journey; and

• invest an estimated $2.1 billion of incremental capital to support revenue and cost synergies.

“This combination will bring together Union Pacific’s expansive western reach and Norfolk Southern’s unparalleled access to eastern manufacturing and population centers in an end-to-end combination,” said NS President and CEO Mark George. “It will create a cohesive freight rail solution with 50,000 route miles that connect 43 states and more than 100 ports.”