Application Volume 2:
Market Analysis and Operating Plans
*This is a preview version and includes only the first five pages of the document.
REDACTED VERSION – TO BE PLACED ON PUBLIC RECORD
BEFORE THE
SURFACE TRANSPORTATION BOARD
DOCKET NO. FD 36873
UNION PACIFIC CORPORATION AND UNION PACIFIC RAILROAD COMPANY
—CONTROL—
NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN
RAILWAY COMPANY
BEFORE THE
SURFACE TRANSPORTATION BOARD
DOCKET NO. FD 36873
UNION PACIFIC CORPORATION AND UNION PACIFIC RAILROAD COMPANY
—CONTROL—
NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN
RAILWAY COMPANY
AMENDED RAILROAD CONTROL APPLICATION
VOLUME 2 OF 4
STATEMENTS CONCERNING MARKET IMPACTS, COMPETITION,
AND SHIPPER BENEFITS; TRAFFIC STUDY; OPERATING PLAN (EXHIBIT 13); SERVICE
ASSURANCE PLAN; RELATED APPLICATION; DENSITY CHARTS (EXHIBIT 14)
VOLUME 2 OF 4
STATEMENTS CONCERNING MARKET IMPACTS, COMPETITION,
AND SHIPPER BENEFITS; TRAFFIC STUDY; OPERATING PLAN (EXHIBIT 13); SERVICE
ASSURANCE PLAN; RELATED APPLICATION; DENSITY CHARTS (EXHIBIT 14)
RAYMOND A. ATKINS
CARRIE C. MAHAN
MATTHEW J. WARREN
ALLISON C. DAVIS
MARC A. KORMAN
Sidley Austin LLP
1501 K Street, NW
Washington, DC 20005
(202) 736-8000
JASON M. MORRIS
JOSEPH H. CARPENTER IV
THOMAS E. ZOELLER
HANNA M. CHOUEST
T. MATTHEW LOCKHART
Norfolk Southern Railway Company
650 W. Peachtree Street NW
Atlanta, GA 30308
Attorneys for Norfolk Southern Corporation and Norfolk Southern Railway Company
April 30, 2026
MICHAEL L. ROSENTHAL
DEREK LUDWIN
JAMES J. O’CONNELL
MATTHEW J. GLOVER
PEGAH NABILI
Covington & Burling LLP
One CityCenter
850 Tenth Street, NW
Washington, DC 20001
(202) 662-6000
CHRISTINA B. CONLIN
JAMES B. BOLES
TONYA W. CONLEY
TANYA L. SPRATT
Union Pacific Railroad Company
1400 Douglas Street
Omaha, NE 68179
Attorneys for Union Pacific Corporation and Union Pacific Railroad Company
VOLUME 2
STATEMENTS CONCERNING MARKET IMPACTS, COMPETITION,
AND SHIPPER BENEFITS; TRAFFIC STUDY; OPERATING PLAN
(EXHIBIT 13); SERVICE ASSURANCE PLAN; RELATED APPLICATION;
DENSITY CHARTS (EXHIBIT 14)
STATEMENTS CONCERNING MARKET IMPACTS,
COMPETITION, AND SHIPPER BENEFITS
Verified Statement of Dr. Elizabeth M. Bailey
2-4
Verified Statement of Dr. Mark A. Israel
2-177
TRAFFIC STUDY
Verified Statement of David T. Hunt
2-388
OPERATING PLAN
Joint Verified Statement of Eric Gehringer and John F. Orr
2-601
Introduction
2-611
Development of the Operating Plan
2-620
Patterns of Service
2-629
Description of Combined Network – Optimized Plan
2-689
Description of Combined Network – Growth Plan
2-719
Impacts on Traffic Density and Mix
2-744
Capacity Needs of the UP/NS System
2-745
Impacts on Passenger Operations
2-756
Equipment Requirements and Utilization
2-780
Consolidation of Other Facilities/Functions
2-800
Projected Territory Changes Required for the Operating Plan
2-822
Conclusion
2-824
Appendix A – Optimized Plan Trains
2-828
Appendix B – Growth Plan Trains
2-834
SERVICE ASSURANCE PLAN
Verified Statement of John W. Turner
2-845
Introduction
2-853
Service Improvements from Integration of Operations
2-857
Yard and Terminal Operations
2-877
Infrastructure Improvements – Capital Improvement Plan
2-895
Information Technology Systems
2-933
Customer Service Integration Plan
2-957
Labor Plan
2-974
Training
2-987
Contingency Plans for Merger-Related Service Disruptions
2-1003
Coordination of Freight and Passenger Operations
2-1043
Timetable
2-1076
Benchmarking
2-1089
Appendix A – Contingency Plans
2-1119
Appendix B – Alternative Dispute Resolution Program
2-1139
RELATED APPLICATIONS
Peoria and Pekin Union Railway Company
2-1145
DENSITY CHARTS
Density Charts (Exhibit 14)
2-1171
Union Pacific Density Chart
2-1172
Norfolk Southern Density Chart
2-1174
BEFORE THE
SURFACE TRANSPORTATION BOARD
Finance Docket No. 36873
UNION PACIFIC CORPORATION AND UNION PACIFIC RAILROAD COMPANY
—CONTROL—
NORFOLK SOUTHERN CORPORATION AND NORFOLK SOUTHERN
RAILWAY COMPANY
Verified Statement
Of Elizabeth M. Bailey, Ph.D.
April 27, 2026
TABLE OF CONTENTS
1 Qualifications, Assignment and Summary of Conclusions
1
1.1 Qualifications
1
1.2 Background and Assignment
2
1.3 Introduction and Summary of Conclusions
3
1.4 Materials Responsive to STB Regulation 49 CFR § 1180.7(b)(2), (3) and (4)
6
2 Overview of the Individual and Combined Railroads
7
2.1 Individual UP and NS Railroads
7
2.2 Combined Railroad
11
2.3 Geographic Overlaps Between the UP and NS Railroads Are Limited
13
2.4 UP and NS Overlaps Are Limited to the Central Region of the United States
15
2.5 Horizontal Competition
17
3 Benefits From the Proposed Merger
22
3.1 Scope for Benefits for Traffic Currently Interchanged between UP and NS
24
3.1.1 Incentives to implement operating improvements
25
3.1.2 Incentives to offer improved service terms
28
3.1.3 Incentives to ensure reliable services
32
3.1.4 These benefits are unlikely without the proposed merger
32
3.2 Scope for Benefits to Other Customers
36
3.3 Diversions Reflect Increased Competition as a Result of the Transaction
38
4 Horizontal Competitive Effects Analyses
42
4.1 Data for the Analyses
43
4.1.1 Data sources
43
4.1.2 The combined waybill data
45
4.1.3 Quantity measurement
46
4.1.4 Data quality screens
47
4.2 Analysis of Access to Customers
48
4.2.1 Customer facilities
49
4.2.2 BEAs
53
4.3 Analysis of Competition Within Corridors
54
4.3.1 Overview
54
4.3.2 Initial screen
55
4.3.3 Results
59
4.3.4 Further analysis of horizontal within-corridor competition
61
4.3.5 Loss of independent routes
68
4.4 Analysis of Competition Between Corridors
70
4.4.1 Overview
70
4.4.2 Destination competition
72
4.4.3 Source competition
78
4.4.4 Alternative specifications
80
5 Conclusion
81
6 Certain Analyses for 49 CFR § 1180.7 (b)
82