Don’t Be a Third Rail: Why the STB Should Trust Competition

The proposed merger between Union Pacific and Norfolk Southern is not a test of corporate size—it is a test of whether regulators still trust competition and market-driven innovation.

Merger review should focus on a straightforward question: Is the transaction reasonably likely to benefit consumers and the broader economy? When regulators depart from that standard and substitute ideological skepticism for economic analysis, they risk undermining both competition and the public interest.

The STB’s Mandate Is Competition, Not Central Planning

The Surface Transportation Board is tasked with ensuring that rail mergers preserve competition and serve the public interest. That responsibility does not extend to freezing market structure or assuming consolidation is inherently harmful. It requires an evidence-based assessment of efficiencies, innovation, and consumer outcomes.

Here, a combined UP–NS network could reduce interchange delays, streamline operations, and lower transportation costs—delivering faster, more reliable service across a truly transcontinental rail system.

Rail Competes Dynamically—Especially with Trucking

Railroads compete most intensely with long-haul trucking, not each other. A more efficient rail network would shift freight off highways, easing congestion, reducing emissions, and lowering infrastructure costs for taxpayers. Importantly, freight rail achieves these benefits through private investment, not public spending—reinvesting roughly $23 billion annually into its own infrastructure.

Competition Is a Discovery Process

Antitrust and merger review should prioritize dynamic competition, not static market shares. Competition is a process of discovery—through innovation, experimentation, and entrepreneurial risk-taking. Blocking mergers based on speculative fears assumes regulators can predict outcomes better than markets, a form of central planning that history has repeatedly shown to fail.

Allowing firms to compete across modes, improve efficiency, and test new organizational models is how consumers ultimately benefit.

Let Markets Work

The UP–NS merger is an entrepreneurial attempt to create a more efficient national freight system. Whether it succeeds should be determined by competition, not regulatory pessimism. The STB should remain focused on consumer welfare, dynamic rivalry, and its statutory limits—and avoid becoming a “third rail” to innovation.

Read the full op-ed in The Washington Times