After decades of consolidation that reduced the Class I railroad count from 23 to six, the proposed Union Pacific–Norfolk Southern merger represents the most consequential shift in U.S. surface transportation in a generation. If approved, it would create the nation’s first true coast-to-coast railroad — an $85 billion transaction spanning 50,000 route-miles and 43 states. The carriers promise operational efficiency, reduced transit times and the other usual merger benefits that somehow never quite materialize for captive shippers but look fantastic in PowerPoint presentations to analysts.
Beyond the projections, this merger will fundamentally reshape supply chains, capital investment decisions and business development strategies across manufacturing, agriculture, energy, construction materials and every community dependent on reliable freight rail.
For rail-dependent shippers, this moment carries both opportunity and risk. The question isn’t whether this merger changes things — it’s how ready organizations are.
Who Feels This First
Industries with heavy rail dependency — fertilizers, chemicals, steel, cement, forest products and other bulk commodities — will feel the earliest effects. These sectors don’t use rail by preference; they use it by necessity. Many facilities are single served, meaning they have exactly one railroad option. When mergers reduce two carriers to one, the economic impact is immediate and direct.
History shows why this matters. Rail mergers are routinely followed by price increases, reduced routing options and service disruptions — a pattern seen in the UP–Southern Pacific integration, the Conrail split and more recently the CP–KCS combination. Today, four Class I railroads already control more than 90 percent of U.S. freight rail volumes. This merger would reduce that to three. For manufacturers, site selectors and economic development teams, this consolidation raises questions about competitiveness, transportation resilience and long-term cost structures.
Business Development Implications
While the regulatory process will stretch into 2027 or 2028, shippers and regional economies shouldn’t wait to react. The merger will directly influence:
Industrial recruitment and site selection. States and communities courting manufacturing, logistics or distribution investment need to understand whether rail access becomes more or less competitive under a consolidated UP-NS system.
Transportation cost competitiveness. PraxiChain’s modeling shows potential five to 20 percent rate impacts on key rail-served corridors and 10 to 30 percent service volatility for single-served shippers during integration periods.
Infrastructure investments. Transload facilities, short-line interchanges and barge terminals may become strategically more important and more valuable as shippers work to recreate the competitive options that consolidation eliminated.
Local economic stability. Service disruptions or pricing pressure at major plants ripple into labor markets, farm input availability, construction supply chains and downstream manufacturing.
Six Things Companies Should Be Doing Right Now
Even if the merger is ultimately approved with conditions, shippers retain meaningful influence right now. Here are the immediate steps every rail-exposed business should take:
1. Request and analyze rail movement data (2019–2024). Understanding your exposure on UP and NS lanes is foundational to any risk assessment and to drafting informed comments to regulators.
2. Verify all facilities are marked “Open to Reciprocal” in RailInc. This designation affects competitive switching rights and becomes harder to rectify post-merger.
3. Model service and cost scenarios. Quantify the impacts of interchange elimination, potential routing changes and volume shifts.
4. Strengthen contracts and negotiate protections. This is the window to incorporate service-level agreements, rate stability provisions and merger-triggered remedies.
5. Build optionality: transload, barge, short-line partnerships. Even if alternatives are used sparingly, credible modal options materially improve negotiating leverage.
6. Prepare company-specific STB commentary. Industry-wide submissions matter, but the strongest STB responses are data-driven and facility-specific, outlining exactly where competitive harm or benefits would occur.
Every major rail merger creates winners and losers. The winners are the companies, communities and industries that prepare early — those who quantify their exposure, articulate their needs and negotiate protections while leverage still exists.
Whether your organization is a shipper, economic development agency or manufacturer evaluating new investment, the next 12 to 18 months will define the rail-competitive landscape for the decade ahead. T&ID
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