A Letter from CEO Mark George on STB Filing

Team NS, 

Today, Union Pacific and Norfolk Southern filed an application with the Surface Transportation Board (STB), the federal regulator that must review and approve the merger before it can proceed, requesting to combine our two companies. This is an important milestone in our journey to offer our customers a transcontinental freight railroad, serving them with one railroad, one standard for operational excellence, and one trusted promise from origin to destination. 

Here, you can find today’s press release and details of the application. This merging of strengths is a bold step we believe will transform our industry for the better and leave a lasting impact for generations of railroaders to come.

We’re grateful to the dedicated team that came together from both companies and worked tirelessly to put forth a thorough and thoughtful application. We believe it exceeds the high standards set by the STB, fulfills all the requirements for approval, and clearly lays out the compelling case for why the merger is in the best interests of our stakeholders. The application also outlines how we intend to carefully integrate our two companies and deliver the merger’s benefits to customers safely and without disruption, and it includes a record-breaking 2,000 letters of support from stakeholders, joining shareholders at both companies who cast votes that were 99% in favor of the merger. 

It’s energizing that customers, importantly, see the potential. We’ve received over 700 statements of support from our commercial partners, including over 500 from shippers. Support from across the country represents farmers, housing market suppliers, chemical industries, intermodal customers, soda ash producers, and short lines. To all of you who support our customers every day and have been answering stakeholder questions related to the merger: Thank you. We’re glad this application will bring greater clarity to those conversations. 

The Ways We’ll Grow and Deliver Real Benefits

• Create a better freight rail option by transforming 10,000 existing lanes from interline service – which require time-consuming handoffs – into safer, faster, and more efficient single-line service. 
• Move freight more efficiently, eliminating an estimated 2,400 rail car and container handlings and 60,000 car-miles each day. 
• Compete more effectively with long-haul trucking, converting an estimated 2 million truckloads of freight from road to rail annually. 
• Accelerate deliveries on key routes – reducing estimated transit times from Southern California to the Ohio Valley and Northeast by up to 20 hours and from Southern California to the Southeast by more than two days. 
• Expand service offerings for our customers by introducing six new manifest trains to bridge the East-West divide more efficiently, reducing over 600 daily car handlings. To meet expected intermodal growth, the combined company plans to introduce a total of six premium intermodal lanes. We’ll continue to add more routes over time to accommodate expected growth from improved service. 
• Grow our intermodal business by more than 1.4 million annual loads, powered by our expanded network and premium service. 
• Unlock new markets for shippers, with 84,000 county-to-county lanes newly accessible by rail for the first time. 
• Strengthen our nationwide footprint, estimating that 105,000 carloads of merchandise traffic will convert from road to rail when single-line service is available to the Watershed markets.  
• Deliver instant savings and greater control for customers through integrated scheduling, tracking, and shipment visibility – a unified digital experience that eliminates the need for costly third-party providers. 
• Improve asset utilization for railcar owners, enabling faster car turns and reducing idle time and equipment costs. 
• Preserve competitive options for customers through Committed Gateway Pricing, streamlining pricing of interline moves for thousands of customer locations that otherwise may not directly benefit from the merger. 
• Invest for the future, anticipating an estimated $2.1 billion of incremental capital to integrate our companies and deliver benefits to our employees and our customers. 

What You’ll Want to Know: Employee Highlights 

Importantly, we recognize that for each of you this merger is personal. The application provides a preliminary overview of how the two railroads will combine once the merger is approved. Below is some of what is included.

• Every union employee who wants a job in the new organization will have one, and we anticipate that the rail volume growth will create approximately 900 net new union jobs by the end of the third year. Aligning operations will involve some regional changes – such as combining certain yards and terminals in Chicago, St. Louis, Kansas City, Memphis, and New Orleans. 
• Preliminary plans for bringing workforces together include estimates for the number of positions that will be reduced, relocated, or remain at locations throughout our system. These estimates will evolve as we get deeper into integration planning, but the STB process forces us to put estimates in the application. One thing we do want to emphasize: much of the estimated position reductions signaled in the application will be achieved by employee attrition that naturally occurs at both companies, aided by the fact that we have already frozen hiring.
• We will maintain a strong presence in Georgia. Atlanta will remain a core location, serving as a regional operating center with a strong commercial presence and a vital hub for technology and innovation.
• Safety remains our top priority. Both railroads have strong safety cultures, and the combined company will continue to invest in systems and infrastructure that enhance safety and reliability. A detailed safety plan, also filed with the STB as part of our application, combines the best practices from each railroad. 

Next Steps

Many of our team members across both companies have been spending time together these last few months, and we will continue to host Jim regularly in the coming months. Jim has enjoyed meeting our railroaders and learning more about our powerful franchise. It is inspiring, even in these early stages, to see our cultures aligning in real time. Like us, Union Pacific has a proud history and workforce, and one phrase continues to stay on my mind as I witness our teams in action: 1 + 1 = 3. 

It’s important to remember that the contents of the application are preliminary, and more detailed plans for how we will bring our businesses together will be determined during integration planning. Our commitment to you remains unchanged: as timelines become clearer, we will share more about what you can expect before the deal closes, including specific information on integration decisions and milestones. 

We hope you will take some time to look through the materials on FORGE and at AmericasGreatConnection.com to learn more. We will also be hosting a virtual company-wide town hall later today at 12 p.m. ET and a virtual town hall for management employees immediately following. This will be an opportunity to hear directly from our leadership team about the application and next steps.

Staying Focused

The most important thing you can do right now is focus on your current role, especially everything we do to ensure our people and our operations stay safe every day. As we continue to deliver during our busiest season of the year – one when families, manufacturers, and retailers depend on us to safely deliver the goods that keep the economy moving – thank you for your dedication, focus on safety, and service excellence. 

Each of you plays an essential role in helping us meet our goals and deliver ever-higher service levels and reliability for our customers.

Let’s keep moving forward, together, with safety and service as our top priority. 

Mark George

President and CEO

Norfolk Southern