Commentary

By Paul Tonsager

The board did not need to find a fatal flaw; by keeping the calendar open, it is slowly killing the proposal.

On May 28, the US Surface Transportation Board( STB) accepted the amended Union Pacific( UP) and Norfolk Southern( NS) merger application. This was the April refiling, submitted after the board rejected the railroads’ first attempt in January. UP and NS will call the acceptance a milestone, but this was not the most important thing the STB did that day.

The same decision held the entire proceeding in abeyance. Without a merits schedule or an environmental review, the board ordered the railroads to supplement nine areas of the filing by July 27 and will not start the review clock until it has that material and is satisfied with it.

Clearing completeness means the filing was good enough to keep but not good enough to approve. The board said, in the same decision, that several parts of the application are unclear or underdeveloped.

This is not where the railroads wanted to be. The STB kept the application alive and refused to set a date for judging it. Discovery continues, so UP and NS keep working, but working is not the same as advancing.

As a result, time has become the real threat to this deal, more so than any single objection opponents are raising. The board did not need to find a fatal flaw; by keeping the calendar open, it is slowly killing the proposal.

The railroads carry the cost of an $ 85 billion transaction sitting in limbo, while the opposition will use this time to organize its filings and line up allies in Congress.

Competitors keep taking real freight in real time, with CPKC selling the single-line service the merged carrier does not yet exist to counter. Everybody waits, but some wait more than others.

The deal’ s own structure makes the delay bite harder: without a voting trust, NS shareholders are not cashed out early. Instead, they must wait for full STB approval to be paid, which puts the entire timeline on their backs.

The merger agreement’ s expiration date of Jan. 28, 2028, extends automatically if the review runs long. Sounds like a safety valve, right? Well, that’ s the trap. Because the deal has no clean expiration and no forcing event, it is more likely to die of exhaustion than from a flat“ no” from regulators.

The case for benefits decays on the same clock, given that the payoff the railroads are selling, led by 2.1 million truckloads moved off the highway, is modeled from a close date. Every quarter that closing date slips, the present value of those benefits— and the central exhibit the board is supposed to weigh— weakens.

On substance, the sharpest signal in the decision is the fact that the STB asked for the applicants’ workpapers as a standalone supplemental item, which, in plain terms, means it could not reproduce the railroads’ own numbers from what they filed. That is a pointed thing for a regulator to put in writing about a benefits case. The board also pulled the St. Louis and Kansas City terminals into one request alongside the TTX railcar pool, on gateways and car supply, a sign it sees neutral access to shared infrastructure as a single unresolved question rather than a set of separate fixes.

For shippers, the takeaway is clear: do not plan around an early close because the initial target the railroads set of the first half of 2027 is now unreachable. If your routing or rate strategy assumes a combined UP-NS network by 2027, rebuild it without that assumption.

I support this merger— and have said so in this publication and elsewhere— because I believe the transcontinental thesis is sound, truck conversion is possible and single-line service creates genuine value. But this is why the execution should worry supporters more than critics. The merits fight can be won on the record.

The July 27 supplement will be the third attempt at getting the STB to review those merits. The board has told the railroads twice what it needs, and those who have watched this industry and agency knew the list before the first application was filed.

At this point, UP needs to give it to them. Put the real numbers and the methodology behind them on the record, and stop trying to win on anything but substance, because every month spent deciding what to hold back is a month of value taken off the merits of the application.

Paul Tonsager holds no equity in either UP or NS and represents no Class I railroad in this transaction.

email: paul. tonsager @ multimodalsolutions. io

60 Journal of Commerce | July 6, 2026 www. joc. com