How Our Organization Is Transforming to Better Serve Customers
● The Union Pacific-Norfolk Southern combination will unlock the capacity of a transcontinental railroad. A unified network will help customers achieve growth objectives in a globally competitive marketplace.
● A coast-to-coast railroad will provide faster, simpler, more reliable and more competitive service, including expanded Committed Gateway Pricing, added unprecedented protections and a new dispute resolution mechanism.
● The new network will remove current friction from fragmentation, aligning incentives, eliminating handoffs, reducing transit times, providing one trusted account team and competing for freight rail simply can’t win today.
Ed Elkins
- Expanded Committed Gateway Pricing: We’ll significantly expand Committed Gateway Pricing, doubling the number of eligible shipments and extending benefits to bulk unit train shippers. The expanded program is the functional equivalent of thousands of haulage agreements in a single enforceable commitment, creating even more opportunities for customers to benefit from the merger.
- Added unprecedented protections: We’ll preserve Class I rail options for 3-to-2 shippers as well as 2-to-1 shippers, where they can legally grant access to another railroad. No prior rail merger has included a similarly broad commitment to preserve 3-to-2 access.
- Established a new Targeted Access Program: In the unlikely event that service performance declines during merger integration, customers would be able to obtain temporary access to alternative rail service. This commitment provides an additional safeguard to help keep freight moving.
- Proposed a new dispute resolution mechanism: If the merger’s public benefits are not being delivered in a timely manner, customers will gain access to a new rate relief process. Combined with the new integration period service protection, this new process provides added accountability to customers.
- Reaffirmed commitments to preserve independent access and competition: Our companies reaffirmed we have no interest in controlling the jointly owned Terminal Railroad Association of St. Louis (TRRA), Kansas City Terminal Railway (KCT), or TTX Company and provided options for implementing that commitment. Union Pacific’s new binding agreement with CN directly resolves the TRRA and KCT ownership questions by transferring Norfolk Southern's interests to CN.
Together, these commitments reinforce a simple principle: customers should be confident they will receive the faster, simpler, more reliable and more competitive service a transcontinental railroad can provide.
A Commercial Transformation Aimed at Better Serving the Customer
The increased customer trust and growth we’re seeing play out right now is a great signal that the transformation we've executed has taken hold. Today, our Commercial organization is more explicitly aligned to customer needs and growth than at any point in our history. We’ve retooled how we deliver value, because our customers’ supply chains demand something very different than they did even five years ago.
Just as important, this evolution hasn’t diluted our historical strengths – strong market and commodity expertise and trustworthy account representatives that serve as internal advocates for the customer. It has elevated them.
A Different Market Requires a Different Model
Today’s customers are not just comparing us against other rail options. Instead, customers are evaluating us against every option: rail versus rail, versus truck, and versus comprehensive end-to-end logistics delivery. Our supply chain solutions for customers are also competing against other sourcing geography, sometimes globally. Expectations are elevated and the bar is higher, which means success requires a different model. Our approach is grounded in four clear, disciplined imperatives that guide how we operate every day:
- Enhance Sales Capability, increasing our commercial agility so we can anticipate customer needs, rapidly recognize opportunities, and shorten the execution loop.
- Create Innovative Deal Structures, testing bold ideas, aligning our interests with those of our customers to solve complex problems, tying performance to execution, and enabling customers to scale with confidence.
- Increase Deal Flow, actively building a sustainable pipeline of quality opportunities that drive further innovation and create new capabilities.
- Improve Ease of Doing Business, aggressively reengineering our processes by leveraging technology and the voice of our customer to ultimately make rail the easy choice.
Check out our Story Yard page on any given day, because across the business, our teams are creating sustainable growth opportunities. The clearest sign of progress is not in one story, but in the pattern emerging across them.
We are winning more freight in competitive corridors because customers are seeing better execution, more creative solutions and a railroad that is easier to do business with — whether that means shifting consumer goods or refrigerated freight from highway to rail, expanding share in import and domestic intermodal lanes, unlocking new grain and industrial moves, or earning repeat opportunities on some of the most sensitive and complex shipments in the market.
That is what momentum looks like, because they’re not isolated wins. It is a growing confidence that our network and our people can deliver when the stakes are highest.
None of that is theoretical. All of it is happening now. And none of it happens in silos. These wins are consistently cross-functional across Commercial, Operations, Customer Logistics, Strategic Planning, Market Research & Forecasting, and Network Design and Planning and Optimization.
Working Hard, and Ready to Do More
Our strategy as a stand-alone company is working. It’s just working against a structural constraint rail has lived with for decades: fragmentation. We’re creating incremental growth in spite of that friction.
But a unified, coast-to-coast network will remove that friction — aligning incentives, eliminating handoffs, reducing transit times, providing one trusted account team, and allowing us to compete for freight rail simply can’t win today.
Unlike other M&A circumstances, a Norfolk Southern merger with Union Pacific doesn’t fix a broken organization, it unlocks a highly-capable one. It’ll take the momentum already building and scale it into something bigger:
- A simpler, more reliable, lower cost experience for customers;
- A transcontinental rail network that better competes head-to-head with truck; and
- A more competitive American freight rail landscape.
We’re operating a best-in-class commercial organization that is aligned with our customers’ objectives to deliver exceptional value in today’s marketplace, and in tomorrow’s as well.
By combining our two networks, we’re ready to begin unlocking the capacity of a transcontinental network for our existing customers’ needs and introducing the power of a unified network to new customers seeking to achieve their growth objectives in a globally competitive marketplace.
We’re eager to get started.