Union Pacific Norfolk Southern Merger Faces Industry Scrutiny

The proposed $85 billion merger between Union Pacific and Norfolk Southern aims to create a transcontinental rail network across the United States. However, it faces concerns from unions and customers regarding competition, safety, and job security. BNSF Railway believes the merger would reshape the industry, while UP emphasizes customer benefits and labor protections. The Surface Transportation Board's (STB) decision will determine the future of rail transport in the US.

Imagine freight traveling from the U.S. West Coast to the East Coast without tedious transfers—moving as seamlessly as vehicles on a highway. This vision underpins the proposed $85 billion merger between Union Pacific (UP) and Norfolk Southern (NS), which promises to create America's first coast-to-coast rail network. Yet behind this ambitious plan lie significant uncertainties that could dramatically alter the industry landscape.

I. The Merger: Opportunity or Challenge?

The combined entity would connect 43 states through over 50,000 miles of track and approximately 100 ports. While proponents tout efficiency gains, the Brotherhood of Locomotive Engineers and Trainmen (BLET) and Brotherhood of Maintenance of Way Employes (BMWED)—representing over half of both railroads' unionized workforce—vehemently oppose the deal.

"This debt-laden merger won't make railroads more competitive against trucks as claimed," said BLET National President Mark Wallace. "We believe this transcontinental railroad would reduce rail's appeal by handing local lines serving small towns to short-haul operators while running slow, multi-mile trains on mainlines. Customers would face a choice between 'hell or highway.'"

II. Opposition Mounts: Customers and Labor Voice Concerns

The American Chemistry Council and its 40 member companies have expressed reservations to the White House, while the Rail Customer Coalition warned the Surface Transportation Board (STB) that mergers typically degrade service and reduce competition.

Customer Concerns: Service deterioration, reduced competition, and operational inefficiencies
Labor Fears: Job losses, compromised safety standards, and worsening work conditions

III. Safety Risks: Cultural Clashes and Operational Hazards

Unions highlight safety concerns in merging two railroads with divergent operating cultures. Norfolk Southern's 2023 East Palestine derailment remains fresh, while UP faces criticism for resisting safety reforms. Notably, UP operates trains exceeding three miles—a practice unions claim increases risks.

IV. Job Guarantees: Empty Promises?

Labor groups accuse UP of offering illusory employment protections, noting the company's proposal grants unilateral control over workforce decisions. "They've crafted loopholes allowing them to modify or cancel commitments at will," union representatives stated.

V. Industry Perspective: BNSF Weighs In

BNSF Executive Vice President Tom Williams noted this would be the first major merger test under STB's 2001 rules requiring proof of enhanced competition. "Eliminating two of four transcontinental routes clearly reduces options," Williams argued at RailTrends. "The 'enhanced competition' standard remains untested—this fails the commonsense test."

VI. UP's Defense: Prioritizing Customer Benefits

UP CEO Jim Vena countered that America lacks a truly national railroad, forcing unnecessary delays when freight transfers between carriers. "Why should 15-25% of shipments get delayed in Chicago?" he asked, emphasizing global competitiveness. The merger would shift truck traffic to rails and streamline operations.

VII. Efficiency Gains: The Single-Line Advantage

Vena cited copper shipments from Arizona to the East Coast as an example—currently slowed by multiple handoffs. Single-line service keeps freight on one train, reducing handling and accelerating delivery.

VIII. Customer Sentiment: Support Amid Skepticism

UP claims nearly 2,000 letters endorse the merger, though acknowledges some dissent. "We'll adopt best practices from both companies while eliminating transfer points—that inherently improves safety," Vena asserted.

IX. Labor Commitments: Lifetime Employment Pledge

UP promises lifetime jobs for all union employees post-merger, citing growth opportunities. Vena described how Mississippi Valley customers could seamlessly ship lumber by rail instead of trucking to Texas.

X. Regulatory Crossroads: STB's Pivotal Decision

The STB must weigh complex tradeoffs—potential efficiency gains versus competition reduction, labor impacts, and safety considerations. Its ruling will determine whether America gets its first transcontinental railroad or preserves the existing competitive balance.

Conclusion: This high-stakes merger presents both transformative potential and substantial risks. While promising operational improvements, it faces legitimate concerns about market concentration and workforce impacts. The STB's verdict will chart the course for American railroading's next era.