The proposed Norfolk Southern-Union Pacific merger, one of the largest in transportation history, faces sharp skepticism from a veteran railroader who says its core promise to divert truckload freight remains unsupported by lane-level detail. Paul Tonsager, CEO and founder of Integrated Multimodal Solutions and a 25-year veteran of CN and Illinois Central Railroad, told FreightWaves that the merger application's claim of diverting 2.2 million truck moves is "vague" and lacks specifics on shippers, corridors, and volumes.
Tonsager's criticism comes after a settlement between CN and Union Pacific injected new momentum into the merger. Until that settlement, Tonsager said, CN "was frankly irrelevant in the conversations that were going on." The deal gives UP access to CN's Elgin, Joliet and Eastern Railway (EJ&E), acquired roughly 15 years ago, which would provide a bypass route around Chicago, reducing dwell and improving network fluidity for intermodal traffic.
The 'Beef' Over Truck Diversions
Tonsager questioned the merger's central cargo-diversion promise: "Where's the beef? I mean, I still haven't seen any specifics — maybe I'm wrong, maybe they're out there — but I haven't seen any specifics like, you know, from Chicago to Kansas City or Oklahoma City to Atlanta, I'm going to take these specific truckloads off and these are the customers I'm going to work with to do it." The 2.2 million truck moves figure, according to Tonsager, is roughly equivalent to the annual truckload volume of a carrier the size of Knight-Swift, putting the claim in context as a relatively modest shift in overall freight flows.
Railroads as Wholesalers
Tonsager also addressed who controls intermodal freight relationships. "The railroads are wholesalers," he said, noting that their direct customers are large intermodal marketing companies (IMCs) and ocean carriers such as Schneider, J.B. Hunt, Maersk, CMA, and Evergreen — not beneficial cargo owners like Home Depot or Walmart. This structure, he argued, means railroads have limited direct leverage over volume growth and must rely on IMCs and steamship lines to translate network improvements into actual shipments.
Drawing on his experience as head of procurement at Maersk — where BNSF and CSX were the primary rail carriers — Tonsager said past interline arrangements between carriers such as IC, WC, and CN fell apart over pricing and customer ownership disputes. He argued a merged UP-NS network could instead approach a steamship line directly and offer end-to-end solutions, for example moving cargo from Norfolk to Kansas City or Norfolk to Minneapolis, in ways the current fragmented structure does not support.
Regulatory Path and Timeline
The Surface Transportation Board (STB) will have final authority over the merger. Tonsager expressed confidence in the STB's process, noting that — unlike regulatory reviews in other countries — the decision rests with a small number of board members rather than the Treasury Department or Justice Department. The merger process has already dragged on for roughly a year, and Tonsager urged the parties to accelerate. "The ball needs to move forward," he said, adding that he expects the latest CN-related filing to shift the STB calculus.
Watch List
- STB decision timeline on the NS-UP merger
- Publication of lane-level diversion specifics by the merger applicants
- Implementation of the CN-UP settlement and EJ&E bypass benefits
- Response from IMCs and ocean carriers on end-to-end service proposals
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