Former Surface Transportation Board Chairman Marty Oberman is incrementally cautious on Union Pacific’s revised application for acquiring Norfolk Southern. It may be challenging for the STB to accept the revised application, as he believes it places excessive burden on the Board, given the filing does not address key issues. The STB has until June 1 to render its decision on whether to accept or reject the application.
Application Strategy and Risk: Oberman views UP’s approach as high-risk and overly application-centric, effectively forcing the Board and stakeholders to approve or deny the deal based solely on what is submitted (which was minimal on some key parts, in his view). He believes UP strategically minimized what it included in the application, leaving key elements underdeveloped or omitted. UP is positioning the transaction as a relatively modest extension of the CPKC merger, though Oberman views the comparison as imperfect. In his assessment, there are meaningful differences in scope, complexity and competitive impact.
Competitive Framework: A core critique of Oberman’s is that UP’s application misunderstands—or stretches—the STB’s merger rules. UP emphasizes growth and generalized efficiency benefits, but the 2001 rules are focused primarily on rail-to-rail competition, not growth writ large. Oberman believes UP’s effort to recast the deal as “enhanced competition” misses the point of what the STB is actually charged with evaluating. The application attempts to quantify benefits vs. costs, highlighting roughly $6.5 billion in purported savings. However, more than $3 billion of that total is attributed to future rail conversion, which Oberman views as highly speculative (we note that the late-1990s Conrail transaction actually exceeded its highway conversion targets, albeit in a slightly longer time frame). He believes the application does not adequately include the infrastructure required to move an incremental ~2 million truckloads to rail—tractors, chassis, trailers, yards, terminals and supporting assets are all absent. Oberman does not believe the STB is actively considering autonomous trucking as a part of its application analysis.
Concessions: Oberman notes that any approval would require “many, many conditions,” including meaningful new rail options for multiple categories of shippers. The burden on the STB would be significant (particularly given that UP offered no concession guidance in its filing): The Board has only ~125 staff, and a merger of this magnitude would require extensive ongoing coordination between the regulator and the railroad to enforce conditions. The proposed CGP (Committed Gateway Pricing) provisions are viewed by the former Chairman as offering limited practical assurance, particularly given that UP retains the ability to withdraw if concessions reach $750 million. As a result, he sees some uncertainty around how durable or enforceable those commitments would be in practice.
Procedural Context and Timeline: Once the STB accepts the application, the statutory 15-month review clock begins immediately. However, the Board is legally prohibited from acting until the NEPA reviews are completed (a step that took longer than expected in the CPKC case and pushed that timetable by several weeks). Oberman expects the STB to be fully constituted with five members before this merger reaches a decision point, as Richard Kloster’s confirmation date continues to move forward. To reach the five-member maximum, he expects Board member Hedlund to be reappointed before her current term expires in December (she was nominated May 11) and for another Democrat to be appointed by POTUS 47.