We hosted a former Class I CEO to review the recent Union Pacific-Norfolk Southern merger application. He sees a very strong filing with acceptance likely though not until 2027. The CGP (Committed Gateway Pricing) solution enhances competition and should pass STB’s test. The network plan supports disclosed truck conversion opportunities in transcontinental and watershed lanes. Competitors are likely compelled to adapt and could eventually propose their own combinations. Our panelist (who prefers his identity not be disclosed) believes UP and NS have put forward a very strong application that is likely to be accepted, though finalized likely in 2027. Review could likely take longer than planned, and a 1Q27 timeframe for a final decision is reasonable with little possibility that the process can be expedited. We believe this could very well get pushed to later in the 1Q27 quarter. Public comments on the merger application’s completeness are due 12/29/25. Overall, Our panelist views the filing as adequately showcasing enhanced competition with no glaring omissions on competition or concessions. CGP effectively does the job of enhancing competition by offering shippers more choices. Traditional gateway pricing has been limited to some lanes in the I-5 corridor and allows a captive shipper to gain access to a competing railroad at pre-determined prices. UP has moved to offer this to all captive shippers of CSX and BNSF across all applicable lanes, significantly expanding choice. A fixed pricing matrix significantly speeds up the transcon’s quoting speed. Additionally, UP has sworn off pricing in excess of…
