Union Pacific and Norfolk Southern Face Critical Deadline as Congressional Pressure Mounts Over $85 Billion Rail Merger

Union Pacific and Norfolk Southern face a Monday deadline to tell federal regulators whether they intend to refile their merger application, as bipartisan opposition to the proposed $85 billion deal intensifies on Capitol Hill.

The Surface Transportation Board rejected the railroads' initial application in January, deeming it incomplete and citing a lack of critical detail on competitive impacts and control of key infrastructure hubs. The agency gave the two carriers until 17th February to indicate if and when they plan to submit a revised filing.

The setback has emboldened critics of the deal, which would reduce America's Class I freight railroads from six to five and create a company handling an estimated 43% of all US rail freight. Last week, Representative Dusty Johnson led 47 House colleagues in a letter urging the STB to conduct a "rigorous and comprehensive review" of the proposal, warning that further consolidation could drive up costs for farmers, shippers and consumers.

Agricultural interests have been particularly vocal. Johnson noted the merger could directly affect the movement of grain to domestic and export markets, with rail remaining the backbone of US agricultural logistics.

Labour unions have also expressed scepticism. SMART-TD cited concerns over safety and long-term industry health, while the Brotherhood of Locomotive Engineers and Trainmen and the Brotherhood of Maintenance of Way Employees Division withdrew their initial support for the deal late last year.

Senate Democratic leader Chuck Schumer has branded the proposal a "hostile takeover of America's infrastructure," warning it could trigger a wave of further consolidation potentially including a BNSF-CSX combination that would see nearly 90% of US rail freight controlled by just two companies.

Union Pacific insists the merger would strengthen competition and benefit the national economy, but all eyes now turn to Monday's deadline.