Union Pacific and Norfolk Southern are offering new customer assurances in the companies’ latest effort to show the Surface Transportation Board their proposed merger is in the public interest.
In a filing with the STB Monday, the companies said the combined railroad would expand committed gateway pricing, offering fixed pricing agreements for twice as many eligible shipments. They also say they will preserve options for “three-to-two” shippers, which are customers that will be served by two railroads instead than three after the merger.
Additionally, the carriers are implementing service protections, noting that if performance declines during the merger integration, customers will be able to obtain temporary access to alternative rail services.
Union Pacific CEO Jim Vena said the moves are designed to ensure customers have a faster, more reliable and efficient rail service “from day one” of the acquisition.
“We talk to our customers every day, and as we listened to them and reviewed the STB’s comments, we saw opportunities to provide additional assurances through an unprecedented set of voluntary commitments to our customers,” said Vena in a statement.
UP and NS have presented two separate filings to the STB as part of their merger process. But despite accepting the second filing, the board put its review on hold until the railroads provided additional information on the deal.
With Monday’s filing, the railroads said they have completed their responses to the STB’s requests.
Both railroads say they expect the deal to close in mid-2027 as the STB continues its review of their merger application.
“The public benefits of our merger are clear,” said Norfolk Southern president and CEO Mark George in a statement. “A stronger supply chain makes American businesses more competitive. Shifting freight from road to rail reduces wear on taxpayer-funded roads, improves safety, relieves congestion and lowers emissions. Reinvigorating the rail industry creates high-paying union jobs.”
Canadian National recently dropped its opposition to the $85 billion merger in exchange for more railroad access in Union Pacific’s existing network in the Midwest and South. CN also acquired Norfolk Southern’s ownership interests in two local railroads that are currently jointly owned by the Class Is. Union Pacific’s potential majority ownership of the two railroads had been a point of contention with the STB.
Intermodal volumes carry Q2 growth for railroads
The railroads are seeing broader freight recovery halfway through the year, with four major carriers reporting double-digit revenue growth in the second quarter as domestic intermodal volumes saw an uptick across the board. Intermodal volumes are shipments that are moved on a route in combined truck and rail operations.
Union Pacific led the way in revenue growth, up 11.5 percent to $6.9 billion in the quarter, while Norfolk Southern saw revenue jump 11.4 percent to $3.5 billion. Revenue at CSX increased 10.1 percent to $3.9 billion. Canadian National generated an 11.2 percent increase in revenue to nearly $3.4 billion in the period.
Of the four railroads that reported earnings, three raised their guidance for 2026. Union Pacific reporting that it expects high-single digit earnings per share (EPS) growth for the full year. In April, UP previously called for mid-single digit growth. The railroad also raised its economic forecast from the year from “muted” to “mixed.”
CSX is now calling for mid-to-high single digit revenue growth, up from earlier expectations of mid-single digit growth. Operating margin expansion is now pegged at greater than 350 basis points, which expands on the expected improvement between 200 and 300 basis points.
And CN is now assuming to deliver low single digit growth in revenue ton miles (RTMs) in 2026, up from a prior projection of flattish growth. The railroad now expects adjusted diluted EPS growth in the mid-to-high single-digit range, compared to a previous expectation of slightly exceeding RTM growth.
All three railroads cited volume growth as a driver of the improved outlook. June intermodal volumes across the industry jumped 11.6 percent to 1.64 million units, according to data from the Intermodal Association of North America (IANA). Domestic containers heavily drove the increase, posting a 15.6 percent annual gain to 799,069 units.
Overall volume at Union Pacific was up 2 percent to 2.2 million revenue carloads, with domestic intermodal volume growth reaching double digits, according to the company. Norfolk Southern’s volume increased 4 percent, with intermodal units jumping 5 percent to 1.1 million. In line with the theme, domestic intermodal volumes escalated 11 percent to 668,900 units.
CSX had the strongest volume jump of the major carriers at 6 percent for the quarter to 1.7 million units. Again, intermodal led the way for the railroad with 9 percent growth to 792,000 units. For CN, volume was up 5 percent when measured by revenue ton-miles, but flat when counting by carloads at 1.4 million.
