On December 19, 2025, Union Pacific Railroad (UP) and Norfolk Southern Railway (NS) entered a transformative phase, jointly seeking Surface Transportation Board (STB) approval for a merger that could create America’s first true coast-to-coast transcontinental railroad.
The application outlines a plan to unite UP’s western network with NS’s eastern routes, resulting in a vast 50,000-mile rail system spanning 43 states and more than 100 ports.
With robust shareholder support but notable opposition from trade groups and unions, the merger’s fate hinges on regulatory review, with finalisation targeted by early 2027.
Strategic implications
The proposed UP-NS combination is best described as an “end-to-end” merger. By connecting two distinct regional rail systems, the new entity promises to deliver enhanced competition and operational efficiency.
The merger aims to convert 10,000 existing interline lanes into single-line service, reducing delays and handling, thus making freight movement faster and more reliable. Shippers could gain access to 84,000 new county-to-county lanes, new direct routes, and significant reductions in transit times along major corridors.
From a strategic standpoint, the merger positions the combined railroad as a formidable player in the North American logistics landscape. The ability to offer seamless coast-to-coast service could attract new customers, especially those seeking reliable intermodal connections and expedited service.
The creation of direct single-line routes, like the planned Southern California to New Jersey corridor bypassing Chicago, represents a game-changing shift in freight routing that could attract high-value time-sensitive freight.
Operational impact
Operationally, the merger plans include over $1 billion in post-merger investments for rail infrastructure upgrades, terminal modernisation, and route expansions.
Key terminals such as Inland Empire (CA), Cincinnati, Toledo, and Council Bluffs (IA) are slated for substantial volume increases, with lifts projected to surge by 163% to 400%.
New infrastructure spending is earmarked for corridors like Kansas City–Butler and New Orleans–Atlanta.
However, not all terminals will see proportional capital investment. Minneapolis, Tacoma, Croxton (NJ), and Atlanta (Austell) are expected to handle increased volumes without significant upgrades.
Instead, operational workarounds such as extended hours, off-site parking, and reopening older yards are proposed, which may result in longer transshipment times, especially for certain flows, such as those from Southern California to Memphis/St. Louis. For example, approximately 191 containers per day may be diverted mid-route in Texas to a second train, adding at least four hours, even under perfect scheduling conditions.
While this diversion supports faster new trains toward Atlanta, Charlotte, and Jacksonville (with promised savings of 70–96 hours for Southeast corridors), technical constraints – like Canadian Canadian Pacific Kansas City’s (CPKC) 8,500 ft. cap on train length – could force train splitting and diminish projected time savings.
Challenges and opportunities
The merger’s improvements do come with trade-offs. Some shippers may experience disadvantages, such as congestion at terminals and increased transshipment times.
The plan’s reliance on operational workarounds at certain terminals, rather than capital investment, may exacerbate these issues.
Additionally, the creation of new, expedited train services may be hindered by physical and ownership constraints, necessitating innovative solutions to deliver on promised time savings.
On the opportunity side, customers stand to benefit from expanded service options, improved asset utilisation, streamlined digital experiences, and simplified commercial processes.
Short line railroads could see new business as more freight moves directly onto their networks. The application pledges to maintain competition and protect customers through measures such as Committed Gateway Pricing and a new dispute resolution program.
Nonetheless, skepticism persists among competitors. Rail companies like Canadian National (CN) and CSX argue that UP’s application is incomplete and overly optimistic, alleging that it lacks necessary market analyses and outdated data that understate the negative impacts.
These parties have called on the STB, the government group that needs to approve the merger, to declare the application incomplete before the January 20 deadline.
Meanwhile, UP claims that 185 routes will improve with fewer handlings, while 62 routes may see more handlings - though details remain sparse. The company emphasises its commitment to avoiding irreversible changes and making adjustments if service degrades.
