Union Pacific and Norfolk Southern file historic $85 billion rail merger proposal with federal regulators
An attempt to create the nation’s first coast-to-coast railroad merger is underway, as leaders from the Norfolk Southern and Union Pacific officially filed paperwork Friday and are now making their case to federal regulators to approve a proposed $85 billion merger.
Industry officials said a merger could reshape the freight rail industry as well as over-the-road trucking.
The nearly 7,000-page merger proposal filing outlines what the two railroads say will be the benefits of a mega merger.
A 30-day comment and investigatory period is now underway at the Surface Transportation Board, the government agency that is tasked with ” … resolving surface transportation disputes, overseeing the flow of commerce, and facilitating infrastructure development,” according to the agency’s website.
The railroads said the merger would create numerous new coast-to-coast freight lines, claiming goods could move much faster and at a lower cost. They also said this would reduce freight bottlenecks in transportation hubs such as Chicago and the combined company would have additional resources to invest billions of dollars for track and switch upgrades, which ultimately will improve service.
The companies admit a merger would have a huge impact on the over-the-road trucking industry, shifting nearly two million truck movements from road to rail. More than half those would move to intermodal rail, potentially a huge volume of new business for the combined company.
Union Pacific and Norfolk Southern said roughly 75% of the projected traffic growth following a merger will come from converting truckload business to rail, with the balance diverted from competing railroads.
Speaking on an investor call Friday, Union Pacific CEO Jim Vena said the intermodal figure, which represents an 11% increase over the combined UP-NS intermodal volume in 2023, would be converted from the truckload market, which the two combined companies compete over. He also expects to gain some freight from competitor BNSF Railway.
“Customers will benefit from faster, more reliable service, improved asset utilization and a streamlined customer experience. Status quo isn’t an option,” Vena said. “Adjustments to train routing and blocking patterns will reduce an estimated 2,400 daily railcar and container handlings per day … This eliminates the unnecessary touches that can lead to incidents [accidents] and delays.”
One independent analyst said the merger could shift millions of truckloads from highways to rail annually.
“This merger creates a ‘direct flight’ for freight,” said Michael Gorman, the Niehaus Chair in Business Analytics and Operations at the University of Dayton. “Right now, moving goods across the country often requires switching between railroads or transferring to trucks for the final legs of the journey. By eliminating those handoffs, rail becomes a faster, cheaper alternative.”
According to Gorman, the proposal represents a fundamental shift in how goods would be moved across the nation.
“The result is fewer trucks on the highway, cleaner air and potentially lower costs for consumers,” Gorman said.
Union Pacific mainly serves the West Coast and Midwest, while Norfolk Southern operates in the South, Midwest and East Coast.
Opponents, including other freight railroads in competition with the two companies, argue a merger would make the U.S. supply chain more fragile by concentrating more freight onto a single railroad, increasing the possibilities of service disruptions.
The filing has drawn criticism from other freight carriers, including Keith Creel, the CEO of the recently merged Canadian Pacific/Kansas City railroad, which runs through Canada, the Midwest, Texas and Mexico.
“The proposed UP-NS merger, unprecedented in scale and scope, would radically and permanently change the U.S. rail network,” Creel said. “If approved, the merger would pose extraordinary and far-reaching risks to customers, rail employees and broader supply chains.”
And the CEO of BNSF, Katie Farmer, also criticized the merger proposal.
“Applicants must now prove their deal will not only preserve but enhance competition, that it serves the public interest, and its purported benefits can’t be delivered through partnerships,” Farmer said. “BNSF is confident that UP has not met these requirements. UP has a long history of making promises in past mergers that they back away from once they’ve secured approval.”
Earlier this year, President Donald Trump fired a Biden-appointed Democrat board member of the Surface Transportation Board, Robert Primus, who is now suing, arguing the move undermines the agency’s independence. The Surface Transportation Board will ultimately decide whether this merger will win approval.
The merger proposal has received public support from Trump. Union Pacific was among the corporations that contributed to Trump’s White House ballroom project, public disclosures show.
Vena and Trump have both said that creating a single East‑West railroad aligns with the president’s vision to “make America great again,” following a meeting between the two at the Oval Office in September.
The Surface Transportation Board is expected to review and vote on the proposed merger in 2026.