Concerns are rising as Union Pacific and Norfolk Southern move forward with plans to merge, pending approval from the Surface Transportation Board (STB). If sanctioned, the merger would create the first transcontinental railroad in the United States, connecting over 50,000 route miles across 43 states and approximately 100 ports. Proponents argue that this unification would streamline operations, reduce shipping costs, and minimize delays in the supply chain.
In a recent email to Supply Chain Dive, Danielle Zanzalari, assistant professor of economics at Seton Hall University, commented on the potential benefits. She stated, “The RCC’s letter overstates the competitive risk,” emphasizing that the two railroads have minimal network overlap, which means shippers would not face diminished options.
Despite these arguments, the Rail Customer Coalition (RCC) expressed apprehension about the implications of reduced competition. The RCC warned that a merger of this magnitude could trigger further consolidation in the industry, leaving shippers with fewer choices among Class I railroads. Currently, the top-tier rail carriers manage around 90% of all freight traffic in the U.S. The coalition highlighted concerns that unchecked past mergers have led to poorer service and increased costs, though they did not provide specific examples to support these claims.
Since the 1950s, the number of Class I freight railroads has significantly decreased from over 100 to just six. In a letter addressed to the STB, U.S. Senators Tammy Baldwin (D-Wis.) and Roger Marshall (R-Kan.) echoed the RCC’s concerns. They noted the importance of maintaining competition in this vital transportation sector and urged caution against further consolidation that could undermine recent advancements in U.S. manufacturing and supply chain security.
The STB is set to receive a formal merger application from Union Pacific and Norfolk Southern on or before January 29, 2026. The two railroads entered into a merger agreement in July 2023, with plans to finalize the transaction by 2027. As these developments unfold, the implications for shippers and the broader rail industry remain a focal point of discussion among stakeholders.
