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Union Pacific-Norfolk Southern rail merger faces resistance
States, labor and shipper groups say Union Pacific's bid for Norfolk Southern will harm competition
The process of formally reviewing the merger began in August and was followed by a string of groups voicing opposition. (Luke Sharrett/Bloomberg)
Key Takeaways:
- Union Pacific’s proposed acquisition of Norfolk Southern is drawing opposition from state officials, shippers and labor unions as federal regulators review the deal.
- Union Pacific says the merger would improve service and reduce highway congestion, while opponents warn of reduced competition, disruptions, higher costs and job losses.
- The Surface Transportation Board’s review formally began in August and is expected to take at least a year before a decision.
A proposed merger between two major railroads that move millions of carloads of freight annually is drawing growing opposition from state officials, shippers and labor unions as federal regulators begin reviewing the deal.
Union Pacific, which reported $7.1 billion in net income in 2025, is seeking to acquire Norfolk Southern, which handles about 7 million carloads annually. Union Pacific argues the merger would improve service and reduce highway congestion.
The Surface Transportation Board must approve the transaction before it can proceed. The review is expected to take a year or more. The process formally began in August and was followed by a string of groups voicing opposition. The last major railroad merger approved by the board took nearly two years to review after the application was filed.
On Sept. 1, attorneys general from Montana, Iowa, Tennessee, Kansas, North Dakota, South Dakota and Florida urged the board to reject the application.
“Safe, efficient, cost-effective shipping is essential for the agriculture, mining, forestry and manufacturing sectors, among many others,” they wrote. “Competitive rail underlies the global competitiveness of the American economy.”
RELATED: Trump supports Union Pacific, Norfolk Southern deal
The Alabama Port Authority on Sept. 8 notified STB of its plans to participate in the public comment and review period, citing concerns about how the merger could harm competition and local businesses and drive up shipping costs.
“Our customers, including some of Alabama’s largest industries, depend on rail connections to reach domestic and global markets,” Alabama Port Authority CEO Doug Otto said. “As an economic development engine for the state, the Alabama Port Authority has a responsibility to advocate for the businesses we serve and the transportation network they need to grow.” He added, “We have serious concerns about any railroad consolidation that would limit competition, create the potential for supply chain disruptions and expose businesses to higher transportation costs, particularly at a time when they are already operating on tight margins.”
Shipper organizations also have weighed in against the proposal, including the National Industrial Transportation League and the Alliance for Chemical Distribution.
Labor groups also have voiced concerns.
The Transportation Communications Union, which is affiliated with the International Association of Machinists and Aerospace Workers, and IAM District 19 in September announced their opposition to the merger, citing potential job losses and concerns about worker protections.
American Trucking Associations doesn't view the rail industry as a significant competitor to motor carriers. “Trucks and trains act more as complements than substitutes. The reality is they compete for only a small sliver of freight,” said ATA chief economist Bob Costello.
The Surface Transportation Board last approved a railroad merger in 2023, when Canadian Pacific Railway acquired Kansas City Southern Railway Co., marking the first such approval in decades.
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The last major railroad merger occurred in 2023, when Canadian Pacific acquired Kansas City Southern Railway. (Luke Sharrett/Bloomberg)
Union Pacific maintains the proposed transaction meets the board’s merger standards and serves the public interest.
The merger application addresses a range of factors the board considers, including public-interest benefits, environmental impacts, national defense implications and protections for railroad employees.
RELATED: Union Pacific says merger would cut shipping costs by $3.5B
“We’ve more than cleared the threshold to move review of this transaction forward, and opponents’ efforts to kill the deal do not change the facts,” Union Pacific CEO Jim Vena said in August.
“We submitted an unprecedented amount of evidence showing why this transaction is good for our employees, customers and America,” Vena continued. “The facts show this merger will create a stronger, more efficient single-line rail network that improves service for farmers and American industry, strengthens competition and moves more freight off the highway and onto rail, a service product our opposition is afraid to compete with.”
