Rail Merger Fight Intensifies as Freight Volumes Hit Fresh Highs

The battle over Union Pacific Corp.’s proposed takeover of Norfolk Southern Corp. sharpened last week. Executives and farm groups traded opposing claims as both railroads posted record revenue on the back of a strong freight rebound.

Union Pacific Chief Executive Officer Jim Vena said he was “99.999 sure” the deal would be approved, describing it as a largely end-to-end combination with few competition concerns. He said more than 500 customers have written in support. The company expects to complete the transaction in the second half of 2027.

Opponents are lining up. The National Farmers Union urged federal regulators to reject the merger, warning that the combined railroad would control nearly half of US rail traffic and leave agricultural shippers with fewer options. Zak Andersen of rival BNSF Railway said the deal would “concentrate 50 percent of the market share of the U.S. rail industry in one company.” He also claimed it would leave about 10,000 facilities served only by Union Pacific.

Norfolk Southern meanwhile reported record third-quarter revenue of $3.5 billion, up 14%, as volumes rose 3% and fuel surcharges climbed. Adjusted earnings increased 10% to 3.62 dollars a share. However, the Atlanta-based railroad’s adjusted operating ratio, a key efficiency gauge where lower is better, worsened by 2.1 percentage points to 65.4% as fuel costs rose. Chief Executive Officer Mark George said demand for rail service “increased during the quarter.”

The industry-wide numbers bear that out. US rail traffic rose 8.5% from a year earlier to 540,135 carloads and intermodal units in the week ending Oct. 17, according to the Association of American Railroads. That was the fastest weekly gain this month. Intermodal volume jumped 12.6%, lifted by record imports at Southern California’s ports. Carloads rose 3.5%, and traffic for the first 41 weeks of the year is up 3.7%.