What’s in It for Us? Shipper Insights on the Union Pacific – Norfolk Southern Merger
In a move set to reshape the North American freight landscape, Union Pacific (UP) and Norfolk Southern (NS) have announced their intent to merge—creating a rail behemoth with unprecedented scale and coverage. This transaction isn’t just another corporate combination; it’s historic in size and impact, signaling a turning point for the railroad industry. With billions in annual freight, industrial sites and supply chains woven through both networks, what’s at stake for shippers is nothing less than the shape and cost structure of logistics for the next generation.
WHAT THE MERGER MEANS FOR SHIPPERS
Consolidation of Networks
The UP–NS merger would create a transcontinental network spanning the U.S. from coast to coast, promising increased reach for shippers. Fewer interchange points will result in less handling, reduced delays, and simplified coast-to-coast shipping. However, the merged railroad could have greater pricing power and less competition across key corridors, influencing service levels and costs. Consideration for reciprocal or intra switching like in Canada is a must in our opinion.
Real Estate and Industrial Development Implications
Combining the networks is likely to trigger a review—and possibly a rationalization—of terminals, yards, and major facilities. Some redundant locations may be closed, impacting property values and development opportunities. The merger could reshape where new industrial parks or Class I-certified sites are developed. New locations will emerge as high-priority zones.
RISKS SHIPPERS NEED TO PREPARE FOR
Loss of Competitive Options
With a merger of this scale, expect reduced choices for routes and pricing - especially in previously competitive corridors. Regulatory review may impose remedies, but outcomes remain uncertain. Less competition may mean fewer opportunities for shippers to negotiate or to pit carriers against each other for better terms. Enhanced competition is a must in our opinion for this merger to be approved.
Service Disruptions During Integration
The logistics of combining two railroads can be messy: scheduling hiccups, crew misalignments, and unfamiliar network operations could all create short-term chaos. Companies with operations or industrial assets tied closely to existing UP or NS routes may find themselves stranded or forced to realign. It’s inevitable but not a reason to prevent the transaction, just a reason to be prepared.
WHAT SHIPPERS SHOULD ASK FOR IN EXCHANGE FOR MERGER SUPPORT (“The Christmas List”)
Long-Term Rate and Service Guarantees: Seek hard commitments on rates, service quality, transit times, and access in contract terms—not just promises.
Protection of Competitive Access: Advocate for regulatory measures like reciprocal switching, rate transparency and trackage rights in essential corridors.
Strategic Capital Investment: Push for joint development of new industrial parks or co-investment in rail-served sites that support long-term growth.
Voice in Integration Planning: Request shipper advisory councils or engagement panels for direct input during merger implementation.
WHAT SHIPPERS SHOULD BE DOING NOW
Audit: Assess your current rail usage—volume, lanes, property assets and service dependencies.
Evaluate Contracts: Scrutinize agreements for vulnerabilities, renewal timelines and termination provisions.
Engage Advisors: Consult operational, legal and regulatory experts and prepare to articulate your interests to regulators like the Surface Transportation Board (STB) and the railroads themselves.
Develop Your “Ask List”: Define in detail what you want from the new UP–NS entity, focusing on both risk mitigation and growth opportunities.
BOTTOM LINE
This merger could disrupt established practices and open new horizons for shippers, and developers alike. The difference between benefiting or suffering from these changes lies in proactive, strategic engagement. Shippers who get ahead of the process, clarify their needs, and advocate effectively are far more likely to be heard—rather than sidelined—during the nation’s most consequential rail merger in recent memory.
READY TO PROTECT YOUR INTERESTS IN THE UP–NS MERGER?
Russell-Kroese Partners has deep experience navigating high-impact rail transitions, regulatory challenges, and shipper strategy. Whether you need a merger-readiness audit, contract review, or a customized “ask list,” we’re here to ensure you don’t just react - you lead.
Contact us today to leverage our insights, advocate effectively, and turn this historic merger into a strategic advantage.