A Union Pacific-Norfolk Southern combination would redraw the railroad map

Summary

A Union Pacific train with UP and Norfolk Southern power crosses UP’s diamond with NS at Momence, Ill., on April 10, 2022. David Lassen Combining Union Pacific and Norfolk Southern into the first transcontinental railroad in the U.S. would create a 52,215-mile colossus that could offer seamless service from coast to coast, bypassing longtime interchange choke points in Chicago and at gateways along the Mississippi River. The two railroads confirmed today that they are in advanced merger discussions. The talks, they said, may not result in a deal. Plus, there’s the potential for a bidding war if BNSF Railway, UP’s Western rival, decides to make a move for NS. And there’s no guarantee that the first proposed merger involving two major Class I systems in more than 25 years would pass regulatory review in Washington. Union Pacific CEO Jim Vena. UP But UP CEO Jim Vena, speaking on the railroad’s earnings call this morning, said the industry needs to move forward during a period of rapid technological change. “If you stand still, you get left behind,” he says. A merger involving well-run railroads can boost the nation’s economy and help shippers because of the elimination of costly and time-consuming interchanges that can be unreliable, Vena says. “The more we can move off of highways onto our railroad, the more we allow our customers to be able to win in the marketplace,” he says. The railroad would stretch from Seattle, San Francisco, and Los Angeles to the Northeast, Mid-Atlantic, Atlanta, and Jacksonville, Fla., with lines blanketing the country’s midsection from the Twin Cities, Detroit, and Chicago to Dallas-Fort Worth, Houston, and the Mexican border. Based on 2024 performance, the combined system would generate $36 billion in revenue, handle 15.3 million carloads and intermodal shipments, have 52,023 employees, and a locomotive roster of 9,301 units. Analysts say a merger likely would lead to a loss of headquarters jobs but eventually would produce growth and more...