Volume 2

*This is a preview version and includes only the first five pages of the document.

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

‍

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 APPLICATIONS; 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

‍

December 19, 2025

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 APPLICATIONS;

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 2-132

TRAFFIC STUDY

Verified Statement of David T. Hunt and Matthew Schabas 2-309

OPERATING PLAN

Joint Verified Statement of Eric Gehringer and John F. Orr 2-490

Introduction 2-500

Development of the Operating Plan 2-509

Patterns of Service 2-518

Description of Combined Network – Optimized Plan 2-576

Description of Combined Network – Growth Plan 2-604

Impacts on Traffic Density and Mix 2-621

Capacity Needs of the UP/NS System 2-623

Impacts on Passenger Operations 2-637

Equipment Requirements and Utilization 2-659

Consolidation of Other Facilities/Functions 2-679

Projected Territory Changes Required for the Operating Plan 2-701

Conclusion 2-702

Appendix A – Optimized Plan Trains 2-705

Appendix B – Growth Plan Trains 2-710

SERVICE ASSURANCE PLAN

Verified Statement of John W. Turner 2-719

Introduction 2-728

Service Improvements from Integration of Operations 2-732

Yard and Terminal Operations 2-752

Infrastructure Improvements – Capital Improvement Plan 2-770

Information Technology Systems 2-813

Customer Service Integration Plan 2-838

Labor Plan 2-855

Training 2-868

Contingency Plans for Merger-Related Service Disruptions 2-884

Coordination of Freight and Passenger Operations 2-924

Timetable 2-957

Benchmarking 2-970

Appendix A – Contingency Plans 2-997

Appendix B – Alternative Dispute Resolution Program 2-1017

RELATED APPLICATIONS

Peoria and Pekin Union Railway Company 2-969

Terminal Railroad Association of St. Louis 2-990

DENSITY CHARTS

Density Charts (Exhibit 14) 2-1011

Union Pacific Density Chart 2-1012

Norfolk Southern Density Chart 2-1014

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.

‍December 17, 2025

TABLE OF CONTENTS

1 Qualifications, Assignment and Summary of Conclusions 1

1.1 Qualifications 1

1.2 Background and Assignment 2

1.3 Summary of Conclusions 3

2 Overview of the Individual and Combined Railroads 7

2.1 Individual UP and NS Railroads 8

2.2 Combined Railroad 12

2.3 Geographic Overlaps Between the UP and NS Railroads Are Limited 14

2.4 UP and NS Overlaps Are Limited to the Central Region of the United States 16

2.5 Horizontal Competition 18

3 Benefits From the Proposed Merger 23

3.1 Scope for Benefits on Existing Traffic 25

3.1.1 Incentives to implement operating improvements 25

3.1.2 Incentives to offer improved service terms 29

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 Shippers 34

4 Horizontal Competitive Effects Analyses 36

4.1 UP and NS Commitments to 2-to-1 Customers 38

4.2 Data 39

4.2.1 Data sources 39

4.2.2 The combined waybill data 41

4.2.3 Quantity measurement 43

4.2.4 Level of geographic aggregation 44

4.2.5 Commodities 45

4.2.6 Data quality screens 47

4.3 Analysis of Railroads Serving Origins and Destinations 49

4.3.1 Overview 49

4.3.2 Analysis and results 50

4.4 Analysis of Competition Within Corridors 52

4.4.1 Overview 52

4.4.2 Analysis and results 52

4.5 Analysis of Competition Between Corridors – Geographic Competition 58

4.5.1 Overview 58

4.5.2 Analysis and results 60

5 Conclusion 69

6 Certain Analyses Required by STB Regulation 49 CFR § 1180.7 (b) 70

Application Volume 2:

Market Analysis and Operating Plans

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