Union Pacific-Norfolk Southern merger adds enforceable safeguards, urging regulator approval

In a July 27 supplemental filing, Union Pacific and Norfolk Southern presented the Surface Transportation Board with a suite of binding commitments designed to allay earlier concerns about competition and service quality in their $71 billion merger. The proposals double the shipments covered by the Committed Gateway Pricing program, guarantee alternative Class I access for the fewer than 40 facilities that might lose a carrier, and create a Targeted Access Program that offers expedited alternative service if performance slips during integration.

A new Rate Alternative Dispute Resolution process gives the Board swift authority to intervene should promised public benefits not materialize. The firms estimate $3.5 billion in annual shipping savings, the conversion of about 10,000 interline routes to single-line service and the addition of roughly 88,000 new county-to-county lanes, potentially moving over 2 million truckloads off highways each year. An accompanying agreement with Canadian National aims to maintain competition in overlapping territories, while other major railroads such as CSX, BNSF, Canadian Pacific Kansas City, and Canadian Pacific remain in the market.