STB Conditionally Accepted Amended UP-NS Merger Application

On May 28, 2026, the Surface Transportation Board (STB) conditionally accepted Union Pacific's (UP) revised application to acquire control of Norfolk Southern (NS) (collectively, the "Applicants"). While the revised application was accepted for consideration by the STB—following the Board's January 2026 rejection of the initial application—the Board has ordered the proceedings be held in abeyance pending further Board order.

The Board determined that, while the revised application satisfies minimum completeness requirements, key elements remain insufficiently developed for a full merits review. As a result, the Board has directed Applicants to provide targeted supplemental information across several core areas before the proceeding can move forward.

Specifically, the Board has directed Applicants to supplement the record across the following key areas:

Enhanced Competition

The Board directs Applicants to provide additional evidence and analysis demonstrating how the transaction will enhance competition. In particular, Applicants must explain how their proposed competitive mechanism (Committed Gateway Pricing) functions, quantify its benefits and limitations, and assess whether broader or more durable competitive enhancements are warranted. The Board also seeks analysis of how single-line service and other conditions would affect competitive dynamics across affected traffic and regions.

Access for 2-to-1 and 3-to-2 Shippers

The Board requires a comprehensive identification of all shipper facilities that would lose a competitive option (2-to-1 or 3-to-2). For each, Applicants must explain how competition will be preserved, justify where no remedy is proposed, and provide detailed information on any access agreements or proposed remedies.

Public Benefits – Diversion Analysis

The Board calls for a more robust and transparent diversion analysis underpinning claimed public benefits. Applicants must test key assumptions (including competitive responses), quantify sensitivities, explain how projected traffic shifts will be achieved, and clarify the relationship between diversion, pricing strategy, and projected benefits.

Service Assurance Plan

Applicants must expand their Service Assurance Plan by defining key performance standards (e.g., “reasonable service,” “substantial deterioration”), clarifying arbitration triggers and remedies, and explaining how affected shippers would be compensated. The Board is focused on ensuring enforceable protections during integration.

Gateways and Car Supply (TRRA, KCT, and TTX)

The Board requires additional detail on how ownership interests in key terminals (TRRA, KCT) and TTX will be managed or divested, and the competitive implications of those arrangements. Applicants must clarify governance, investment incentives, divestiture mechanics, and potential competitive effects associated with retained or temporary influence.

Market Share Projections

The Board requires Applicants to further develop their projected market share analysis by explaining how increased post-merger shares on specific routes could affect competing routes, including whether reduced traffic could undermine their viability. In addition, Applicants must account for recent industry changes—such as other rail mergers and acquisitions—and assess how those developments may affect their ability to achieve the traffic diversions underpinning their market share projections.

Downstream Merger Impacts

Applicants must provide a more developed discussion of how this transaction could influence future industry structure, including the likelihood and implications of additional Class I combinations and their cumulative effects on competition and network stability.

Passenger Rail

The Board requires additional analysis of impacts on passenger operations, including specific routes not fully addressed and more detailed modeling of how increased freight traffic will interact with passenger schedules and capacity.

Workpapers

Applicants must provide a complete, organized, and verifiable set of workpapers, including improved indexing, transparency, and traceability between datasets and application claims, to enable meaningful review by the Board and stakeholders.

The Board has directed Applicants to file all supplemental information by July 27, 2026, after which it will determine whether the application is sufficiently developed to proceed to the next phase of the proceeding.

Click here to read the STB's May 28, 2026 decision.