In mid-July, reports surfaced that Union Pacific was interested in pursuing an acquisition of Norfolk Southern.
“My first reaction was shock,” says Chris Jahn, CEO of American Chemistry Council. “Four of the biggest railroads control 90% of traffic. I was surprised two of the big majors would consolidate and continue down the path that from a shipper standpoint has been borderline disastrous.”
Today, there are six class 1 railroads, but Jahn says the railroad industry used to maintain 23 major providers.
Both Class 1 railroads, the merger of Union Pacific and Norfolk Southern would create what the companies say is the transcontinental railroad across 43 states and 50,000 route miles.
Mike Seyfert, president and CEO of the National Grain and Feed Association (NCFA), released the following statement after the news: “NGFA looks forward to hearing from the Union Pacific and Norfolk Southern railroads and learning how they believe the merger will create resilient and reliable efficiencies and incentives in timeliness of service and deliveries – along with fair and reasonable rates to better serve our members. NGFA will also undertake extensive analysis and discussions with our members to determine the impact on cost and competitiveness for American agriculture.”
The Surface Transportation Board (STB), the oversight board for the deal, will proceed with a regulatory review process. While the companies submitted a notice of intent on July 28, 2025, they say they intend to file their merger application on or before Jan. 29, 2026. After that, STB will issue a schedule for the rest of the review process.
“This is the biggest rail merger they’ve ever considered,” Jahn says. “It’s also the first merger under a new rule that sets a higher bar. This merger has to enhance competition, not just preserve it. Going from more railroads to fewer, I don’t see how it will enhance competition going forward.”
Jahn also says President Trump’s executive order announced in April prohibits the creation of any monopolies.
“Regulators should reject this deal, unless it clearly enhances competition and improves service,” Jahn says. “For two decades, we’ve dealt with unprecedented price increases and declines in service. We need to take a step back, and see what can we do to improve service and improve competition. We need more competition, not less, it’s just common sense. STB needs to do its job and protect the U.S. against monopolies.”
According to NGFA, 3.2 million rail cars of grains, oilseeds and other agricultural products move by rail on an annual basis. That adds up to be 10% of all rail shipments. At least 26% of grain has at least one rail movement.
Jahn says by volume and revenue, members of the American Chemistry Council are a top three customer of railroads.
“Nearly three-fourths of our members are captive shippers — they have one choice of railroad and their rates have increased 240% over the last 15 years,” Jahn says. “That’s compared to a 24% increase if you have a choice of railroad. Essentially, already three-fourths of our members have a monopoly.”
The most recently approved rail merger was the 2023 merger of Canadian Pacific Railway and Kansas City Southern forming the first cross border network.
“That was a completely different situation than what we are talking about today,” Jahn says.
Offering an alternative in how to find efficiencies, Jahn points to the newly announced partnership of BNSF and CSX as a potential road map for how to improve rail service. Those two rail lines focused on offering intermodal services for a coast-to-coast service network.