OPINION:
When rail service is reliable and competitive, supply chains function, prices remain steady, and most of the country remains blissfully unaware of the whole situation.
When rail service fails, it can disrupt the economy across all 50 states.
That’s why the proposed merger between Union Pacific and Norfolk Southern — which faces a critical, potentially industry-shaping refiling deadline before the end of April — deserves sober scrutiny.
It would create the first coast-to-coast freight railroad system in modern history, linking dominant Western and Eastern networks across most of the country. A transaction of this scale will shape competition, service and investment for decades to come.
This merger could release tremendous upside, so it shouldn’t be opposed reflexively. In a healthy market economy, companies combine assets to achieve greater efficiency and deploy capital more effectively.
Yet rail is not a typical market.
It is a network industry central to the U.S. economy in which many customers have limited alternatives. Congress gave the Surface Transportation Board a public interest mandate for major rail mergers, requiring applicants to prove that a merger would enhance competition, safety, service and public benefit.
On Jan. 16, the Surface Transportation Board unanimously rejected the application of Union Pacific and Norfolk Southern as incomplete. The companies had not provided the information required under the board’s rules.
Completeness matters. The application omitted market share projections that would have supported the companies’ own claims about traffic growth and post-merger conditions.
If applicants claim that a merger will reshape traffic flows and expand reach, then regulators must evaluate how that would affect market power. Past estimates cannot replace accurate projections.
The companies also failed to submit the complete merger agreement and other required instruments. Schedules and exhibits are not minor attachments; they contain provisions that affect competition, labor, service commitments and the way regulators structure conditions.
In a merger of this magnitude, regulators and stakeholders must be able to review the full agreement to assess enforceability and long-term impact.
None of this proves that the merger cannot be justified, but it does demonstrate that the companies failed to meet the basic standard for launching a review of the largest rail consolidation in a generation.
The stakes are not abstract. Agricultural producers, manufacturers, energy companies and other sectors, as well as their customers, depend on reliable rail service.
In March, the American Farm Bureau warned that the merger would limit farmers’ transportation options and expose them to negative pricing and service changes. When options narrow, costs can rise, and disruptions can ripple through supply chains, leading to tighter margins and higher prices for consumers.
The lack of due diligence from Union Pacific and Norfolk Southern in their merger application raises broader implementation questions.
Even before returning to the White House, President Trump emphasized affordability, energy dominance and stronger supply chains as priorities in building a stronger economy and improving Americans’ quality of life. Achieving those goals requires effective infrastructure and robust markets.
An unvetted merger increases the risks of service problems or competitive distortions down the line. When large consolidations fail to deliver promised benefits, Washington intervenes. That intervention, particularly if Democrats gain control of Congress or the White House, could ultimately undermine the pro-growth policies it seeks to protect.
Republican officials expect a rigorous review of this merger from the Surface Transportation Board. A group of Republican state attorneys general has urged federal scrutiny of the transaction, and members of Congress have emphasized that the railroads must demonstrate clear, measurable benefits for manufacturers, agricultural producers, the energy sector and consumers.
That is not anti-business sentiment; it reflects the importance of credibility and transparency in preserving public confidence in market outcomes.
As the companies prepare to refile their application, a revised submission should reflect the seriousness that a merger of this magnitude demands. It should include the full merger agreement and present a service assurance plan that affected communities and industries can evaluate with confidence.
Most important, it should provide complete market impact analyses that project future competitive conditions.
If Union Pacific and Norfolk Southern can make that showing, then the merger should be judged on its merits. If they cannot, then the board should enforce the standards set by Congress.
In a transaction this large, process is not a technicality. It is the foundation for whether the deal strengthens or weakens the American economy. The public deserves nothing less.
• Joe Grogan served as assistant to the president and director of the Domestic Policy Council during President Trump’s first administration. He is the president and co-founder of Public Policy Solutions.
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