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STB Keeps UP-NS Merger Alive, but Board Member Flags ‘Lack of Transparency’

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STB Keeps UP-NS Merger Alive, but Board Member Flags ‘Lack of Transparency’

The Surface Transportation Board (STB) unanimously rejected three motions to dismiss Union Pacific and Norfolk Southern‘s revised merger application.

But the board’s newest member used the moment to fire a warning shot across the railroads’ bow.

On Friday, the federal regulator denied motions filed Aug. 6 by competing railroads BNSF Railway, CSX and five shipper associations arguing that the merger proposal failed to meet the “prima facie” threshold under the board’s 2001 merger rules. A prima facie review evaluates whether a merger application contains sufficient evidence to support a finding that the transaction is consistent with the public interest.

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The Surface Transportation Board said supplemental information from the railroads was sufficient to restart its review, with a final decision not expected until after May 2027.
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The 4-0 vote was procedural. The board stressed the five-page decision “does not reflect any determination on the merits” and “is not an endorsement” of the railroads’ arguments.

The sharper signal came in a separate concurrence from the STB’s Richard Kloster, a Trump administration appointee sworn in June 5.

“First, I believe that there has been a lack of transparency and depth in the application. Applicants have submitted thousands of pages of documents, yet they do not offer a very robust plan for how they will address competitive concerns or mitigate potential harms,” Kloster wrote. “They also rely heavily on the benefits to intermodal shipments, a market segment which, by today’s standards, is already competitive.”

” However, he criticized a “letting the line out slowly” strategy of dribbling out minimal concessions.


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