Union Pacific and Norfolk Southern in Talks to Create First Coast-to-Coast U.S. Freight Railway

Union Pacific and Norfolk Southern, two of the largest freight railroads in the United States, confirmed yesterday that they are in advanced discussions to merge, potentially forming the country's first coast-to-coast rail network. If completed, the deal would create a $200 billion freight powerhouse, significantly altering the landscape of U.S. rail transportation.

Union Pacific stated that the merger would streamline shipping between the East and West Coasts by eliminating the need for cargo transfers between different railway operators, improving efficiency across the national supply chain.

However, the proposed merger is expected to encounter substantial regulatory scrutiny, particularly from the Surface Transportation Board (STB), the federal agency responsible for approving such deals. The STB has historically opposed rail consolidations that reduce competition and drive up costs. Labor unions and freight customers have also voiced early concerns that the merger could weaken competition and lead to increased shipping prices.

A Revival of Gilded Age Ambitions

The proposal evokes the grand visions of early 20th-century railroad barons, who built vast networks of track during a time when rail was the dominant mode of freight transport. While total freight rail mileage peaked in 1916, much of that infrastructure has since given way to the rise of trucking and a wave of industry consolidation.

Today, Union Pacific and Warren Buffett-owned BNSF control most freight tracks west of Chicago, while Norfolk Southern and CSX operate primarily in the East. Reports suggest that BNSF and CSX may also be exploring a merger of their own to compete with a combined Union Pacific–Norfolk Southern entity.

Industry analysts argue that such East-West mergers could inject new life into a sector grappling with volatile freight demand, cost pressures, and reliability issues. But even if both sides reach an agreement, regulatory approval may take time. The STB’s review of the most recent major rail merger in 2023 lasted nearly 17 months, and its current position on further consolidation remains unclear.