Dec 31: UP–NS vs Everybody: Why Every Class 1 Is Attacking the 6,700‑Page Merger Filing

Описание: The biggest rail merger in recent history has just encountered its first obstacle.


On December 19, Union Pacific (UP) and Norfolk Southern (NS) submitted a 6,692-page application to the Surface Transportation Board (STB) to establish the first true transcontinental railroad. By last Monday, all other Class I railroads—CPKC, CN, CSX, and BNSF—had submitted comments urging regulators to reject it.


Their main argument? The application is “deficient.”


In regulatory terms, that generally means incomplete paperwork. However, in this case, the competitors accuse UP and NS of withholding the specific data necessary to assess whether this merger could create a dangerous monopoly.


If you are a shipper, broker, or supply chain strategist, this isn’t just legal jargon. It’s the opening salvo in a battle that will shape the U.S. freight network for the next 20 years.


Here is a breakdown of what’s missing, why it was left out, and the blind spots that should keep you up at night.


The “Strategic” Omissions


The competing railroads aren’t nitpicking typos. They are flagging gaps that cut to the heart of competition.


1. The Missing “Walk Away” ClausesCPKC and CN noted that the application redacts the conditions under which UP or NS can sue each other or kill the deal. Why does this matter? Because those clauses reveal what the railroads themselves view as the biggest antitrust risks. If they are terrified of a specific divestiture condition, shippers should be aware of it.


2. The $399,000 PaywallThe headline promise of this merger is the conversion of 2 million truckloads to rail. But the data backing that claim comes from S&P Global Transearch, and it wasn’t included in the public filing. CPKC noted that accessing this data incurs a cost of $399,000. Effectively, UP and NS are asking the public to “trust the math” because checking their work costs six figures.


3. The Static Market Share TrickBNSF, the railroad with the most to lose, landed the heaviest technical blow. They pointed out that UP/NS only provided current (2023) market shares. They completely ignored the 2 million “new” loads in their market share projections. You cannot claim massive growth in your press release but hide that volume in your regulatory filing to make your market dominance look smaller.


4. The Mississippi Black BoxCN highlighted that the application glazes over the “watershed” area, within 250 miles of the Mississippi River, where shippers might go from three carriers to two. Without a lane-level map of this region, shippers can't prove they are losing competitive options.


Mistake or Move?


Did the high-priced lawyers at UP and NS simply forget to include these details? Unlikely.


This looks like a calculated risk. The strategy was likely to file a “thin” application to start the regulatory clock, gauge the STB’s reaction under the strict 2001 merger rules, and then supplement the filing later.


However, the plan backfired. The rivals didn’t just file comments; they filed a unified, precedent-cited dismantling of the application. By holding back, UP and NS handed their competitors a perfect narrative: They are hiding the data because the competitive reality is worse than the brochure.


Expect UP and NS to file a supplement by the January 2 deadline that un-redacts some terms and provides the missing maps. But the damage is done—the timeline will slow down, and the STB will likely commission its own independent studies.


The Real Blind Spots


While the lawyers fight over redactions, two massive operational realities are being ignored.


The “Meltdown” RiskThe application promises $1 billion in “synergies.” In M&A, synergies usually mean cost cuts. But they also promise to handle 2 million new loads.


History (specifically the UP-SP merger in the 1990s) teaches us that you cannot cut costs and aggressively add volume simultaneously without breaking the network. The application lacks a detailed capital plan showing exactly where the physical capacity for those 2 million loads will come from. If they cut headcount before they build track, service will collapse.


The Duopoly TrapUP and NS refused to model “downstream impacts”—i.e., whether this merger forces BNSF and CSX to merge in response. They called it “speculative.”


It is not speculative; it is inevitable.


If this deal goes through, the pressure for a BNSF-CSX merger becomes irresistible. That leaves the U.S. with two rail networks. The STB knows this. The industry knows this. By refusing to model it, the applicants are asking us to sleepwalk into a duopoly without checking the price tag.


The legal drama is just the warm-up. The map is being redrawn. Make sure you aren’t the one left without a chair when the music stops.


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