The ‘Mathematical Impossibility’ Behind the UP–NS Merger
Atlantic Systems Inc’s Drew Robertson Just Told the STB the Numbers Don’t Work
Drew Robertson’s recent submissions to the Surface Transportation Board deserve close attention, because he’s not an armchair critic—he’s the person a lot of serious rail people call when the math stops making sense. As President of Atlantic Systems, he’s spent his career buried in waybills, traffic models, and merger impacts, not press releases.
In his latest comments on the UP–NS control docket, Robertson reviews the Applicants’ diversion calculations and tells the Board that the market-share projections for this $80 billion-plus deal are a “mathematical impossibility” unless TTX, shippers, and IMCs invest billions in new equipment and capital.
This analysis does more than criticize. It provides regulators, competing railroads, and freight financiers with a useful framework.
Leading With Drew’s Study: The “Friendly IMCs” Problem
Robertson’s filing goes straight to the main issues in the UP–NS case, instead of getting caught up in less important details.
He points to the STB’s January 18 decision, which found the original UPNS application incomplete and directed the railroads to provide market-share calculations based on projected traffic diversions. Robertson says these calculations can’t be accurate unless they include the billions in equipment and capital needed from TTX, shippers, and IMCs.
He says that without including this equipment, the market-share calculations the Board asked for “remain a mathematical impossibility.”
He supports his argument using UPNS’s own consultant analysis.
The Oliver Wyman table that breaks the narrative
UPNS engaged Oliver Wyman to model traffic diversions. Exhibit 2‑3, as summarized in Robertson’s filing, presents the following:
Carload to carload
UPNS: +237,000
Other railroads: –237,000
Truck to carload
UPNS: +188,000
Truck: –804,000
Intermodal to intermodal (linehaul + IMC)
UPNS linehaul: +204,000
UPNS‑aligned IMCs: +204,000
Other rail/IMCs: –204,000
Truck to intermodal
UPNS linehaul: +1,233,000
UPNS‑aligned IMCs: +1,233,000
Truck: –1,233,000
Summary of net changes:
UPNS (carload + intermodal linehaul): +1,862,000
UPNS‑aligned IMCs (dray/beyond rail): +1,437,000
Other railroads/IMCs: –441,000
Truck: –2,037,000
Robertson’s conclusion is straightforward:
“The principal beneficiaries of UPNS diversions are UPNS and its allied IMCs. By these calculations, these ‘friendly’ IMCs will take a commanding position in the intermodal drayage market.”
The Applicants state they will remove 2 million trucks from the highway, but Robertson’s analysis suggests that UPNS and a few aligned IMCs would dominate the drayage and intermodal markets.
This issue is about both public benefit and market power.
What Drew Gets Exactly Right
The main point of his filing is a change in perspective: in intermodal transport, the real competition isn’t rail versus truck, but UPNS versus other railroads within a tight IMC–rail system. The key battleground is the IMC–rail interface, not the truck lane.
Robertson highlights significant issues with Oliver Wyman's projections for truck-to-intermodal diversions.