A Merger That Preserves the Status Quo, At Best

by Jim Mathews / President & CEO

Earlier today, Union Pacific filed its long-anticipated application with the Surface Transportation Board seeking approval for an $85 billion merger with Norfolk Southern. If approved, the transaction would create the first truly transcontinental freight railroad in U.S. history, stretching across 43 states and hosting a majority of the nation’s intercity and state-supported passenger rail network.

The filing runs nearly 7,000 pages, and it will take weeks to fully digest. So, I won’t promise this is a bullet-proof analysis. But I dug down this morning into the passenger-route specifics in Volume 2 of the UP-NS filing, and my initial review raised a lot of serious concerns for me, not because the application's details portend catastrophic harm, but because it sets such a low bar for success.

First off, let’s stipulate this: preservation in this instance is not progress. I’ve been saying for months now in various settings that we don’t have to settle for the status quo — heck, Congress explicitly rejected the passenger-rail status quo in 2021 when it wrote the Infrastructure Investment and Jobs Act, which became the Bipartisan Infrastructure Law. Throughout its filing, Union Pacific repeatedly asserts that the merger will allow additional freight trains to operate while maintaining current passenger service levels. That phrase appears again and again, applied to dozens of Amtrak routes and commuter services nationwide. From a passenger perspective, this is a strikingly modest claim.

Maintaining today’s service is not the same as enabling growth. Federal rail policy — reflected in the Bipartisan Infrastructure Law, the Corridor ID Program, and years of congressional direction — aims to expand frequencies, improve reliability, and connect more communities. By contrast, the merger application largely frames success as avoiding degradation of existing service, not improving it.

That’s a pretty important distinction and it matters a lot, especially for a transaction of this scale. You can read our full press release issued this morning by clicking here, but one thing we're trying to foot-stomp for reporters and observers is this mega-merger's scale: the combined UPNS host 57 percent of Amtrak's state-supported and long-distance routes, carying 63 percent of all Amtrak state-supported and long-distance ridership. And nearly half of the 69 routes selected by the Federal Railroad Administration to be part of the Corridor Identification Program travel or would travel over combined UPNS rights-of-way.

The carriers’ capacity arguments also raise eyebrows or at least raised mine. In multiple corridors, Union Pacific and Norfolk Southern say they can add freight trains without harming passenger operations because there is “sufficient capacity” to absorb the increase. Hmmm, really? Only a few years ago, Union Pacific told regulators with a straight face that it would cost roughly $1 billion to add enough capacity to convert the Sunset Limited from a three-times-per-week train into daily service.

It’s hard to reconcile those two positions. If the network truly has ample latent capacity today, why was daily passenger service portrayed so recently as prohibitively expensive? As one member of our policy team put it bluntly: the math ain’t mathing.

And I have to share another observation from another member of our policy team:

“If the ex-PRR Main Line between Pittsburgh and Harrisburg has sufficient existing capacity for four additional freight trains per day, why has [Norfolk Southern] been insisting for so many years that they don't have capacity to add a second daily Pennsylvanian unless they get billions of dollars in public investment to expand the corridor?” they ask. “I would love to know what these ‘passenger-specific infrastructure projects’ mentioned on p. 152 are, but...the cited supporting document 'Workpaper NS Line-Of-Road Volume-Capacity Summary.xlsx' doesn't appear to be included in the released volumes.”

Formal parties to the deal with standing have access to these workpapers but, so far at least, we don’t and probably won't. So, rather than share their work with the taxpayers, voters, passengers, commuters, residents, and others who will feel the effects of this mega-merger, their position with the general public is, “just trust us, this is different.”

Where the application does describe potential passenger benefits, they are often tied to projects that are not merger-driven at all. Improvements cited for routes like the Crescent, Carolinian, Piedmont, and Pennsylvanian frequently rely on state-led or publicly funded projects already underway or contemplated. Think double-tracking in Virginia, corridor upgrades in North Carolina, or PennDOT investments in Pennsylvania.

In other words, many of the “passenger benefits” attributed to the merger appear to depend on public investment that would (or should) occur regardless. The filing offers little evidence that the merger itself meaningfully accelerates, funds, or guarantees these improvements.

And I just have to get back to the “trust me” idea again. Assurances to “maintain” passenger service have to be weighed against history. Both Union Pacific and Norfolk Southern have been hauled before regulators and the courts in recent years over failures to comply with Federal passenger rail on-time performance requirements. Those cases ended not because the problems were imaginary, but because formal enforcement, and binding commitments, were required.

Against that backdrop, promises of adequate capacity and preserved service levels, without clear enforcement mechanisms or passenger-specific growth commitments, ring hollow.

Perhaps the most telling feature of the filing is what it does not include: binding commitments to expand passenger service, explicit capacity set-asides for future frequencies, or merger conditions designed to advance national passenger rail goals. For a deal that would reshape the rail network for decades, the absence of a forward-looking passenger vision is glaring.

Rail Passengers has been watching this closely for awhile, and we'll continue our detailed review of the application and engage fully in the STB process. But based on what we have seen so far, this merger appears designed to protect existing obligations — not to unlock the growth and reliability improvements passengers, communities, and policymakers are rightly demanding.

Preserving the status quo may be good enough for freight railroads. But it’s not good enough for the traveling public.