By Bill Pan
Contributing Writer
Federal regulators have paused the review of Union Pacific’s proposed acquisition of Norfolk Southern, an $85 billion deal that would create the United States’ first transcontinental freight railroad.
Union Pacific’s freight trains are a familiar sight in the Santa Clarita Valley, as they pass through the SCV regularly on the rail corridor shared with the Metrolink commuter line.
The Surface Transportation Board on Thursday accepted the Class I railroads’ revised merger application but declined to set a procedural schedule. It is instead directing both companies to provide additional information on a range of issues.
“There are several aspects of the revised application that are unclear or underdeveloped and require supplementation,” the board said.
Among the issues identified by the board are whether the merger would enhance rather than reduce competition, how the transaction would benefit the public, how the companies would maintain service levels after the merger, and questions involving gateways, car supply, and market share projections.
The companies have until July 27 to submit the requested information.
Union Pacific and Norfolk Southern currently interchange traffic at key gateways in Chicago, St. Louis, Memphis and New Orleans. The proposed merger would eliminate those interchanges.
A combined network, according to documents filed with the STB, would span coast to coast, linking major metropolitan areas and roughly 100 U.S. ports. It would also create “single-line service opportunities for more than 88,000 county-to-county lanes nationwide, including 45,000 lanes in the watershed” region, according to the companies.
Union Pacific and Norfolk Southern argue that single-line service would remove both operational and commercial friction between carriers. They told regulators that the streamlined network would cut transit times and delays, improve reliability and lower logistics costs.
But the merger, announced in July 2025, has drawn skepticism from customers and rival railroads, which argue the deal would concentrate too much market power in one freight giant, driving up shipping costs and weakening competition.
Under current U.S. railroad merger rules, applicants must show, among other things, how a proposed combination would enhance competition and improve service.
The deal has also drawn opposition from state officials. In February, the attorneys general of Iowa, Kansas, Mississippi, Montana, North Dakota, South Dakota and Tennessee urged the Department of Justice to “carefully scrutinize the merger,” which they said would lead to “higher rates and fewer shipping options.”
In Thursday’s decision, the STB said it had examined public comments on the proposed merger but found that the issues raised did not warrant rejecting the application.
Union Pacific and Norfolk Southern welcomed the move and said they would “work constructively” with the STB.
“We are confident this merger will deliver more reliable and lower-cost transportation options for American businesses,” Union Pacific CEO Jim Vena said in a statement.
Norfolk Southern CEO Mark George echoed that view, saying the company has “more confidence than ever in the value this proposal will deliver for all stakeholders” and looks forward to a full and transparent review.
BNSF Railway, a rival Class I carrier that opposes the merger, also applauded the board’s decision to pause the review process.
“Holding the proceeding and environmental review in abeyance until UP and NS provide this supplemental information underscores the seriousness of those deficiencies,” BNSF said in a statement.
Class I railroads are the largest railway carriers in North America, as designated by the STB based on annual operating revenue. They form the backbone of the continent’s freight transportation network, operating extensive systems that connect ports, cities and industrial centers across the United States and Canada.
There are six freight and cargo-focused Class I railroads in North America, with Amtrak being the only Class I railroad primarily focused on passenger service. Union Pacific and BNSF alternate as the largest Class I railroad depending on the metric used.
