As the STB reviews the UP-NS merger, it should also keep in mind that the outcome of this case will affect more than a single business transaction. Rather, it constitutes a test of whether America's regulatory framework will remain grounded in facts, evidence and the rule of law, or follow a path where politics and ideology influence economic decision making.

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When unencumbered by needless and stifling federal regulation, private-sector mergers provide an important component of economic growth.  

Mergers between complementary companies increase efficiency, boost investment and encourage innovation that benefit consumers and the economy.  

In recent years, however, regulatory suffocation of proposed mergers has become distressingly politicized, with regulatory bodies too often substituting bureaucratic and ideological preferences for market-driven outcomes.  That violates Americans’ concepts of fairness and a free economy.  Regulation should remain strictly rule-based and focused on facts, established competition standards and the rule of law, not politics.  

Currently, the proposed Union Pacific-Norfolk Southern (UP-NS) merger illustrates that hazard perfectly.  The merger itself offers a transparent, mutually beneficial and rational business venture, but government approval once again tests whether regulation in our country will proceed based on facts or bureaucratic fiat.  

Fortunately in that regard, recent trends aren’t entirely negative.  

During President Trump’s first term, his administration’s deregulatory efforts allowed America’s economy to become the strongest in modern history.  Reduced government intervention in the private economy allowed businesses to thrive solely on their own merits rather than government interference.  

That reduced interference in our economy also helped sustain investor confidence by providing assurance that businesses will succeed or fail based on market performance rather than political favoritism.  After all, investors are understandably more willing to commit capital when they know government decisions rely upon objective facts, established rules and competitive outcomes, rather than bureaucratic fiat.  

Under that more objective standard, UP-NS merger applications suggest a likelihood of great success and economic growth that the new combined railroad would bring.  The merger will result in a railroad that will boost the U.S. economy exponentially.  

Specifically, the companies would create a more streamlined freight network connecting more states across the country and linking both coasts.  By doing so, the merger would eliminate time-consuming bottlenecks within the current rail network and allow businesses to reach a wider customer base, both abroad and at home.  Additionally, with more market access comes more revenue and economic growth.

Simply put, the UP-NS merger would mean innovation and efficiency, not imaginary monopolies and anti-competitive practices.  

Making that case to regulatory authorities, both rail companies presented the governing Surface Transportation Board (STB) with extensive research in response to requests on the merger’s outcomes.  The companies submitted a nearly 7,000-page application to the STB detailing improved competitive effects, better service plans, significant public benefits, reduced environmental impacts and more efficient shipper outcomes.  The parties subsequently supplemented their merger application with even more research requested by the STB, leading to acceptance of the merger for review.  

Before the opportunity to weigh the merits of the case, the STB must first consider whether the applicants have presented a prima facie case.  That process asks whether the facts they disclose, construed in the light most favorable to them, sufficiently support the finding that the transaction is consistent with the public interest.

In this case, competitors have tried to convert that preliminary question into a final verdict against the merger.  On August 6, BNSF and CSX each asked the Board to deny the application, and five shipper associations filed a joint motion making the same request.  CPKC also weighed in with comments along similar lines.  Granting any of those motions would unfairly end the case before an evidentiary record exists, and before the opponents’ own claims face any scrutiny.  

Whether one personally supports or opposes the merger, the sheer size and scope of the filing demonstrate that it’s supported by extensive analysis and facts.  

In a recent joint filing, Union Pacific and Norfolk Southern highlighted how the objections raised by BNSF, CSX, CPKC and shipper groups challenge the evidence presented in the application, but do not show that the application lacks the evidence needed to proceed.  Those disagreements are for the Board to resolve after reviewing the full record, not before.

On August 18, the STB then lifted the hold it had placed on the proceeding and adopted a procedural schedule that runs into 2027, while stating that the pending motions for summary denial would be handled in a separate decision.  Obviously, an agency preparing to throw out an application does not ordinarily set a calendar for evidence first.  

As Union Pacific and Norfolk Southern have conducted their merger application with transparency and respect for the rule of law, regulators should do the same, without allowing politics or bias to interfere in their deliberation.  

As the STB reviews the UP-NS merger, it should also keep in mind that the outcome of this case will affect more than a single business transaction.  Rather, it constitutes a test of whether America's regulatory framework will remain grounded in facts, evidence and the rule of law, or follow a path where politics and ideology influence economic decision making.  

The extensive research, transparency, and compliance demonstrated by Union Pacific and Norfolk Southern throughout the merger application process deserves an equally objective review.  If approved on its merits, the merger has the potential to strengthen America's supply chains, expand economic opportunity and enhance the efficiency of the nation's transportation system.  

Regulators must therefore allow facts to guide their decision and recognize that responsible, pro-competitive mergers like the UP-NS proposal offer powerful drivers of innovation, investment and long-term economic growth.