On Jan. 16, the Surface Transportation Board (STB) reported on their website that, in a unanimous decision, the major merger application filed by Union Pacific (UP) and Norfolk Southern (NS) on Dec. 19, 2025, is incomplete because it does not contain certain information required by the board's merger regulations.

"Under the law, the Board therefore must reject the application and does so without prejudice to Applicants refiling a revised application remedying the deficiencies identified in the decision. Today's decision is based solely on the incompleteness of the Dec. 19 application and should not be read as an indication of how the Board might ultimately assess any future revised application," said the STB.

The board's regulations 49 C.F.R. part 1180 detail the information that must be contained in a major merger application. This includes: (1) Full system impact analyses that include, among other things, market share projections for the entity to be created by the transaction; and (2) The entire merger agreement, including the submission of any contract or other written instrument that pertains to the transaction. See the full STB Jan. 16 statement here: https://www.stb.gov/….

Class 1 railroads Canadian Pacific Kansas City (CPKC), Canadian National (CN), CSX Transportation (CSXT) and Burlington Northern Sante Fe (BNSF) and National Grain and Feed Association, along with other shippers, sent comments on Dec. 29, 2025, to the STB to reject the UP-NS merger application because it was incomplete. Read their comments here: https://www.dtnpf.com/….

Mike Steenhoek, executive director of the Soy Transportation Coalition, said in an email to DTN in response to the merger rejection, "The STB instructed UP and NS that an application of this nature must require certain information, but they had failed to do so. As a result, the application was deemed to be incomplete and therefore rejected. This does not mean that STB is rejecting the overall potential merger. In their statement, STB made clear that the ruling on the incompleteness of the application is not an indication on whether or not they will ultimately approve the merger."

The Code of Federal Regulations (49 C.F.R. section 1180.1 a) states "Although mergers of Class I railroads may advance our nation's economic growth and competitiveness through the provision of more efficient and responsive transportation, the Board does not favor consolidations that reduce the transportation alternatives available to shippers unless there are substantial and demonstrable public benefits to the transaction that cannot otherwise be achieved. Such public benefits include improved service, enhanced competition, and greater economic efficiency. The Board also will look with disfavor on consolidations under which the controlling entity does not assume full responsibility for carrying out the controlled carrier's common carrier obligation to provide adequate service upon reasonable demand."

Steenhoek reiterated that "the threshold that needs to be met in order to allow a merger to proceed is not whether it will maintain competition, but whether it will enhance competition. Proving a merger will enhance competition is certainly a higher threshold to achieve."

Steenhoek added, "I continue to hear from agricultural rail shippers who are supportive of the proposed merger and others who are strongly opposed. Those who are supportive point to the prospect of increased fluidity and efficiency of rail service from one area of the country to the other as the rationale. Without question, it is a fundamental reality within supply chains that handoffs -- whether between modes of transportation or providers of transportation -- frequently result in additional costs. Freight does not like to be treated like a baton at a relay race. The fewer handoffs, the better. Those who have long promoted consolidation between the eastern and western railroads have argued that eliminating these handoffs between one railroad and another will reduce costs and enhance marketing options for shippers. Certain agricultural shippers argue that eastern shippers will have augmented access to western markets and ports. Similarly, western shippers will have increased access to eastern markets and ports.

"Those agricultural shippers who oppose the proposed merger express how further consolidation in the rail industry will result in a reduction of competition among railroads and how this could result in increased rates and diminished service. It is in the best interest of agricultural shippers to have as many transportation providers as possible -- whether within a given mode of transportation or across modes -- competing for their business. When the number of transportation providers decreases, the concern among many is that the balance between a railroad and rail customer will shift away from the customer and toward the railroad. The negotiating power of the rail customer, as a result, will diminish."

STB provided UP and NS an opportunity to respond by Feb. 17 regarding whether they will refile the application. The revised application must be submitted no later than June 22, 2026. So far, there has been no comment by the UP or NS, but it is expected they will refile.

Link to Code of Federal Regulations (49 C.F.R. section 1180.1): https://www.ecfr.gov/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

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