UPDATE: The potential merger outlined below was officially announced Tuesday, July 29, 2025 - an $85 billion acquisition of Norfolk Southern by Union Pacific, creating Union Pacific Transcontinental Railroad. Watch our video for more:
Two of the United States' class 1 railroads are reportedly making significant progress toward a merger that would connect the country's east and west coasts with one company. That company would combine Union Pacific and Norfolk Southern, and reports suggest an agreement could come as soon as this week. So how did we get here and what will it mean for intermodal service in particular?
Railroad merger background
The idea of railroad mergers in the U.S. is hardly new. In fact, they've happened before - as recently as a few years ago when Canadian Pacific merged with Kansas City Southern to create what's now known as CPKC. But a merger of the scale that UP and NS would approach is unprecedented, as the country has never seen one company offer transcontinental freight rail service (CPKC does connect Canada, the U.S. and Mexico north to south).
Railroad mergers are difficult to accomplish due to competitive concerns, labor agreements and a variety of regulatory hurdles that go beyond what other companies looking to combine face. Recent Intermodal Logistics Podcast guest Bill Stephens with Trains.com took us through the recent history involving the Surface Transportation Board, moratoriums and more:
But even with those hurdles, momentum for the UP and NS merger has picked up pace much like a freight train. There are always whispers and backchannel discussions, especially when the industry is struggling a bit. But in early June, UP CEO Jim Vena said it out loud at a conference in Chicago:
“Do I, Jim Vena, think that a merger would be beneficial for the country? Absolutely,” he said. “Second, would it be beneficial for our customers? Absolutely. Would it be beneficial for how we look at some of the U.S, forces and products that we move across the country? Absolutely.”
Still, that was before our conversation with Stephens, who at that time was dubious of anything coming to fruition. Then, the rumors of Union Pacific - the nation's largest freight railroad - acquiring Norfolk Southern began to significantly gain steam. And now, reports indicate we can expect a merger announcement as soon as later this very week.
What's next if a merger is announced?
If, as expected, the two sides firmly announce plans to combine, that announcement would in essence mark the beginning of a much longer process. The STB has already prepped a Merger Resources Page to offer insights into their part. The page includes links to past mergers along with relevant statutes and regulations. Additionally, it offers a sample timeline, setting expectations of up to a 22 month review process:
While much of the concerns about competition and pricing would be tied directly into the STB review, the company would also have to offer assurances regarding jobs, as losses of positions in a combined company would seem a distinct possibility. Labor unions which have existing, separate agreements with both UP and NS would have leverage to ensure the vast majority of their members would not suffer negative effects, and perhaps receive incentives to sign off from their perspectives.
Competition of course becomes front and center too, as combining two class 1s shrinks the number in North America from six to five (not counting Amtrak and its passenger service). That means the remaining competitors would at the very least look for concessions. For instance, some in the industry believe CN would look for a Mexico opportunity, while another potential follow-up could be another transcontinental merger attempt between BNSF and CSX. Worries about pricing must be addressed as well, as the only transcontinental railroad would lack direct competition to quote west to east coast lanes as a single provider.
However, analysts believe the Trump Administration will shift from previous ones who've been less merger-friendly, with the thinking that the president himself as well as others in key governmental positions would be interested in both the legacy argument of connecting the coasts and open to the idea of such a move improving the competitive environment.
Key arguments for a merger
After going over the nuts and bolts - and some of the obstacles/potential negatives - there are a few key arguments in favor of a merger like this. As freight has been down for some time, carriers from small trucking companies to large railroads and international ocean carriers have all taken hits to different degrees. Combine that with rail's longer-term decline in market share, and there are plenty of business-only arguments for creating a UP-NS combination valued at nearly $200 billion (with annual revenue in the neighborhood of $36 billion based on 2024 earnings reports).
For shippers and consumers, Vena underlines the benefit of coast to coast shipping without the need for an interchange in Chicago or another middle-of-the-country city. Eliminating that could speed transit, increase efficiencies and theoretically both lower rates and increase profits. Avoiding the need for interlining also means a load stays with the same carrier the whole journey, using its systems exclusively. While a merger would eliminate one major railroad, it may also better position the industry for competition against trucking - and a chance to regain lost market share.
Stay with us to follow the merger story as it develops and the various implications of how it unfolds. And if you're ready to move some freight, so are we. Start by requesting a quote with us, and we'll discuss how to get you up and running quickly. For more information about InTek Intermodal, or the logistics and supply chain space in general, check out our Freight Guides.
