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Railroads foresee downstream deals

❌ 1,000+ job cuts and 500+ transfers expected

✍️ Merger hopefuls make service commitments

📈 Rail giant would be expected to take market share

🤝 Catch up quick: Canadian National drops opposition

Union Pacific and Norfolk Southern acknowledged in a regulatory filing Monday that approval of the proposed merger could prompt downstream deals.

Why it matters: It might result in a U.S. freight rail duopoly, they acknowledge, but they don't view that as negative to the public interest.

The $85 billion deal to create a coast-to-coast railroad would pressure BNSF Railway and CSX, the other two U.S. Class I carriers, to merge.

Yes, but: BNSF owner Berkshire Hathaway CEO Greg Abel has expressed disinterest in such a deal, Union Pacific and Norfolk Southern noted.

What they're saying: Any future consolidation "does not reduce the public-interest case for the merger or warrant additional conditions," Union Pacific argued in the filing to the federal Surface Transportation Board.

The other side: Allowing the number of U.S. Class I carriers to dwindle to two would be "consolidation not even seen during the railroad barons of the early 20th century," more than 20 U.S. senators wrote in an opposition letter.

"This would effectively eliminate any competition in the railroad industry," the senators argued. 

Catch up quick: The downstream merger effects were among several additional disclosures the railroad regulator ordered from the railroads. 

1 big thing: Railroads foresee downstream deals

Illustration of a child guiding a green toy train with dollar sign wheels off the edge of a table

The railroads project 1,138 workforce reductions and 546 transfers from the deal, they disclosed in a separate filing.

Union Pacific employed more than 29,000 workers and Norfolk Southern had more than 19,000 as of the end of 2025.

Why it matters: The Surface Transportation Board ordered employee impacts be reported publicly by Monday.

Between the lines: The exhibit was already filed with the STB as confidential,  but the board decided it wasn't privileged information.

Zoom in: Union Pacific job cuts are based on attrition assumptions and were factored into Norfolk Southern considerations, the railroads said.

By the numbers: The railroads expect nearly 700 job eliminations in the first year, nearly 300 in the second, and almost 160 in the third.

About 20 transfers are expected in the first year, 370 in the second and 150 in the third. The railroads say they expect to create 1,200 net new union jobs by the third year of integration.

State of play: Rail unions are split on the deal.

The combined railroad's largest union, SMART-TD, supported it in a deal for a jobs-for-life guarantee for its members. That guarantee extends to all unionized employees working at the railroads when the deal closes.

Teamsters-affiliated unions are opposing it, and they plan to make noise as the midterms approach.

What they're saying: "Employees benefit from new economic opportunities," Union Pacific CEO Jim Vena wrote to the STB.

Editor's note: This story has been updated to add the amount of net new union jobs the railroads are projecting will be created by year three of integration, and to note the jobs-for-life guarantee extends to all unionized employees.

2. ❌ 1,000+ job cuts and 500+ transfers expected

Illustration of Ben Franklin wearing a train conductor hat.

Union Pacific and Norfolk Southern did add sweeteners to their proposal.

What's inside: The additional commitments include service agreements, customer and service level protections, and benefits for bulk shippers.

Zoom in: The railroads doubled the number of shipments eligible for the Committed Gateway Pricing program to nearly 258,000 carloads from 133,890.

Customers would be able to obtain temporary access to alternative railroads if service performance declines during the deal's integration.

The railroads would preserve Class I options for three- to two-railroad shippers as well as two-to-one shippers, where they can legally grant access.

A rate arbitration process would be available if the board determines the merger's projected public benefits were not being realized and the railroads haven't acted reasonably to deliver them.

What they're saying: "We are more confident than ever that this merger is good for America," Vena told the STB in his letter.

3. ✍️ Merger hopefuls make service commitments

Animated illustration of scales with railroad crossing lights blinking

BNSF, CSX, Canadian National, and CPKC would lose between 0.6% and 4% of their total carloads and intermodal units to a merged Union Pacific-Norfolk Southern, the applicants projected in the filing.

The big picture: The East-West transcontinental carrier would control 40% or more of U.S. freight rail traffic and 50,000 miles of rail.

What they're saying: Increases in the combined railroad's market share "are the product of enhanced competition and customer choice — not diminished competition," Union Pacific and Norfolk Southern wrote. 

"Competing railroads will be spurred to improve service, reduce rates, or both."

"The public interest is served when merging railroads attract traffic from competitors by offering superior rates or service, regardless of the impact on those competitors," the railroads added.

Between the lines: That much market dominance would make Union Pacific by far the largest U.S. rail carrier and give it a level of bargaining power with shippers that no railroad has ever enjoyed.

It's up to the STB to decide whether that's in the public interest.

4. 📈 Rail giant would be expected to take market share

Illustration of a model train carrying a large wad of cash in the toy coal car. 

Canadian National dropped its opposition to the merger in exchange for new operating rights from Union Pacific, the railroads announced last week.

Why it matters: The agreement thinned the merger's opposition while expanding the railroads' access to each other's networks.

Zoom in: The MOU provides Canadian National new rights over Union Pacific's network between Memphis, Tennessee, and Eagle Pass, Texas, to improve its access to Mexico.

Union Pacific gains more operating rights on Canadian National's Elgin, Joliet and Eastern Railway corridor to bypass rail congestion in Chicago.

If the merger goes through, Union Pacific will sell shares in the Terminal Railroad Association of St. Louis and Kansas City Terminal Railway to Canadian National, a divestiture concession it offered to regulators.

The other side: BNSF argued Union Pacific's agreement with CN undermines the case for the deal by showing service agreements can replace mergers.

a divestiture concession it offered to regulators

5. 🤝 Catch up quick: Canadian National drops opposition

Illustration of two hands reaching out to shake hands in front of a railroad crossing sign. 

July 28, 2026

1 big thing: Railroads foresee downstream deals