Union Pacific and Norfolk Southern filed the first of two required data submissions with the Surface Transportation Board, tackling one of the nine topics the STB demanded before it will continue reviewing their merger. The filing focuses on gateway and car supply control at TRRA, KCT and TTX. The other eight topics, including the enhanced competition analysis and market-share projections, are due by July 27.
This is the railroads’ first detailed response since the STB paused the case and ordered supplemental data. It covers the terminal railroads and freight car pool that determine how much interchange capacity and equipment access other carriers keep after a merger. It does not address the harder question of how much market power UP-NS would hold.
The divestitures: UP and NS say they don't control the Terminal Railroad Association of St. Louis (TRRA) or Kansas City Terminal Railway (KCT), the switching railroads that move freight between Class I networks in those two cities.
To keep it that way, they offered several options to shed NS’s roughly 14.29% TRRA stake for no consideration or a nominal $1, so combined UP-NS ownership stays under 50%. The filing lists three ways that could happen:
Sell it to one of TRRA's other owners, BNSF, CN, or CSX;
Transfer it back to TRRA; or
Divest it to an outside railroad
UP and NS have not committed to one option. That will be resolved later with the STB.
On TTX, the industry-wide freight car pool that nearly every Class I railroad draws equipment from, UP and NS currently hold a combined 56.8% stake — UP 37.03%, NS 19.78%. The merged company committed to divesting down to a combined 49% stake.
The pawn line: UP and NS argued that TRRA’s other owners “are using TRRA as a pawn in their efforts to defeat the proposed UP/NS merger,” according to the filing.
The chokepoints: TRRA and KCT are the physical crossings where St. Louis and Kansas City interchange traffic moves between Class I networks. Ownership limits there affect which routing and gateway options remain open to shippers on those lanes. A merged UP-NS with outsized control of the TTX car pool would have more say over equipment allocation across the industry during tight car supply cycles.
What's next: The bigger test comes on July 27, when UP and NS must file the remaining data sought by STB to judge whether the merger serves the public interest. This includes an enhanced competition analysis, 2-to-1 and 3-to-2 shipper-access scenarios, market-share projections, and a service-assurance plan.
